Forming a U.S. company. offers numerous advantages for both domestic and international entrepreneurs.
A U.S. business entity provides credibility and trust, making it easier to attract investors, partners, and customers, especially for international businesses looking to enter the U.S. market. It also allows for easier access to U.S. banking and payment systems, including merchant accounts and PayPal.
From a legal standpoint, U.S. companies offer strong liability protection, especially with LLCs and corporations, which separate personal assets from business debts.
Certain states, such as Nevada, Wyoming, and Delaware, provide privacy protections, allowing anonymous ownership and nominee services. Take advantage of our US CPA professional services for your US company formations.
USA Federal Income Tax Requirements
Generally speaking, any business entity formed in the United States must comply with specific Federal Income Tax requirements. Those requirements vary by entity type, and your chosen business structure dictates how your corporate entity is taxed in the United States.
Understanding the main business entity types that can be formed in the United States is crucial for any entrepreneur or business owner. This knowledge empowers you to make informed decisions about your business structure.
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Corporation (Corp)
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General Partnership (GP)
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Limited Partnership (LP)
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Limited Liability Company (LLC)
Given that each US State is a sovereign entity, the same US entity type can have a different legal and regulatory framework depending on the State where the business entity is formed. This makes choosing the right US State a crucial matter for your business success, as it can significantly impact your business operations and tax obligations.
USA Federal Tax Requirements for LLCs
By default, the IRS classifies an LLC as a pass-through entity:
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Multi-Member LLC: Taxed as a partnership, requiring Form 1065, with each member receiving a Schedule K-1 to report their share of income.
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Single-Member LLC: Treated as a disregarded entity for tax purposes, meaning profits and losses are reported on the owner’s personal tax return (Form 1040, Schedule C). However, disregarded entities with foreign ownership are required to file a pro-forma Form 1120 and Form 5472 with the IRS by the corporate tax return due date.
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An LLC can elect to be taxed as a C Corporation by filing Form 8832 or Form 2553.
USA Federal Tax Requirements for Corporations
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The corporation is a taxable entity in its own account and it therefore pays income tax on profits (Form 1120), and shareholders pay tax on dividends;
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Corporate tax rate is 21% (as of 2024).
USA Federal Tax Requirements for Partnerships
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Any type of partnership (i.e., general partnership or limited partnership) is a pass-through entity, meaning income is reported on the partners' personal tax returns.
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The partnership itself does not pay federal income tax
Federal Income Tax Deadlines
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March 15: Deadline for Partnerships (Form 1065) with a calendar year-end
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April 15: Deadline for C Corporations (for calendar year corporate taxpayers) and Single-Member LLCs (Form 1120, 1040)
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Extensions Available: Form 7004 can be filed for corporate and partnership extensions
How Can I Help?
Understanding business tax requirements is crucial for compliance and financial success. Our team of tax professionals can help you:
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Choose the best tax structure for your business
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File IRS tax returns accurately and on time
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Optimize tax strategies to minimize liability
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Assistance in the opening of a US bank account with a reputable US financial institution
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Bookkeeping and financial statements preparation for your US company
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Tailored US CPA corporate services for your US company
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Taxpayer representation before the Internal Revenue Service
Take Advantage of My International Corporate Services
I offer bespoke corporate services to foreign clients wishing to form a USA company. Setting up a company in the United States involves constant compliance with US tax laws and regulations at the Federal and State levels. Thanks to my US CPA services, you can rest assured that your US company remains compliant with all the accounting and tax requirements of the United States.
Do not hesitate to get in touch with me if you are looking for a US CPA who can take care of:
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The preparation and filing of the US tax returns for your US company
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Bookkeeping services
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Preparation of financial statements for your US company
Are you seeking assistance for your international business journey?