Do I have to pay US taxes with only 5 months living here as a foreigner with LLC?

The 180-day rule is actually part of what's called the "Substantial Presence Test," but it's more complicated than just counting days. There are actually two tests the IRS uses to determine if you're a tax resident: First is the Green Card Test - if you have a green card, you're a tax resident regardless of how many days you've been in the US. Second is the Substantial Presence Test, which counts days over a 3-year period with a formula. For the most recent year, you count all days. For the year before, you count 1/3 of days. For the year before that, you count 1/6 of days. If the total is 183 days or more AND you were in the US for at least 31 days in the current year, you're considered a tax resident. Even if you don't meet these tests, your LLC income is likely still taxable in the US as it's US-sourced income. The US taxes foreign persons on income that's "effectively connected" with a US trade or business. There may be tax treaties between your home country and the US that could provide relief from double taxation. You'd need to check the specific treaty.

After reading your situation, I thought I'd share my experience. I had almost the exact same situation last year with my own foreign status and US-based business. I was getting conflicting advice from different accountants and was really worried about double taxation. I ended up using https://taxr.ai to analyze my situation, and it helped tremendously. I uploaded my past tax documents and answered questions about my time in the US, and it showed me exactly which test applied to my situation and how my LLC income needed to be reported. The tool even identified a tax treaty provision between my country and the US that my accountant had missed! It saved me from making a huge mistake on my taxes and potentially paying way more than necessary. The analysis showed me exactly which forms I needed to file for my unique situation as a non-resident with US business income.

Just wanted to share an update after taking the advice here. I was in a similar situation as the original poster with a US LLC but living abroad most of the year. I tried https://taxr.ai after seeing it mentioned and it was incredibly helpful. The system analyzed my situation and confirmed I needed to file as a non-resident with US-sourced business income. It identified the exact tax treaty provisions that applied to my situation (I'm from the UK) and showed me how to properly document everything to avoid double taxation. The best part was that it explained everything in simple terms so I could understand the reasoning behind the tax requirements. I was able to take this information to my accountant who agreed with the assessment and helped me file correctly. Saved me thousands in potential double taxation!

Hey, just want to share something that helped me when I was dealing with a similar foreign taxation issue. After weeks of trying to get through to the IRS for clarification (calling repeatedly and getting nowhere), I found this service called https://claimyr.com that got me connected to an actual IRS agent in about 15 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c I was honestly shocked it worked because I'd been trying for weeks to get through on my own. The IRS agent was able to confirm my tax obligations as a foreign business owner and gave me official guidance that I could rely on. Saved me loads of stress wondering if I was getting the right information from random internet advice.

I need to eat my words and apologize for my skepticism. After commenting here, I decided to try that Claimyr service myself because I was desperate to talk to someone at the IRS about my foreign tax situation similar to the original poster's. I had literally spent 3 weeks trying to get through to the IRS international tax department without success - either getting disconnected or told to call back later due to high call volume. Used the service yesterday and got connected to an IRS agent in about 20 minutes. The agent confirmed that as a non-resident with a US LLC, I was indeed subject to US taxation on that income regardless of how many days I physically spent in the US. They also directed me to the specific tax treaty forms I needed. I'm still a bit shocked it actually worked after all my failed attempts. Saved me from making a potentially expensive mistake on my tax approach.

I went through something similar when I moved to the US from Canada with my business. The key thing to understand is the difference between your PERSONAL tax residency status and your BUSINESS tax obligations. Your LLC as a sole proprietor is considered a "disregarded entity" which means all business income flows through to your personal tax return. However, since the business is US-based, that income is considered US-sourced and therefore taxable in the US regardless of your personal residency status. There might be Foreign Earned Income Exclusion options or tax treaty benefits available, but those typically apply to foreign-earned income, not US-sourced income. This is why your accountant is saying you need to pay US taxes on the LLC income. Check if there's a tax treaty between your home country and the US that might provide credit for taxes paid to avoid double taxation.

Just one more thing to consider - if your wife was on an F-1 student visa while studying here, that can also affect your situation. F-1 students are usually considered non-residents for tax purposes for the first 5 calendar years they're in the US. So if your accountant was suggesting you file jointly, that seems odd because generally non-residents can't file joint returns with other non-residents. There's an exception if you choose to treat a non-resident spouse as a resident for tax purposes, but that would mean BOTH of you would be taxed on worldwide income, which probably isn't advantageous in your situation. Filing separately might be the better option, with you filing Form 1040-NR for your US-sourced LLC income only.