LLC for NON-US Residents - Wyoming vs Delaware? Tax implications for digital business

Your understanding is partially correct, but there are some important nuances to clarify. For Wyoming LLCs owned by non-US residents, the 30% tax is not on gross revenue but on US-source income after allowable expenses (effectively on profits). This is typically handled through withholding requirements on certain types of income. Regarding Delaware, you're right that it offers pass-through taxation, but as a non-US resident, you'll still be subject to US tax obligations on US-source income regardless of which state you form your LLC in. The IRS doesn't exempt you from federal taxes simply because you formed in Delaware. The key difference is that Delaware has an annual franchise tax ($300 as you mentioned), while Wyoming doesn't. However, both states will require you to maintain a registered agent (additional annual cost of ~$100-200). What's most important for your situation is understanding how the US-Foreign country tax treaty (if one exists) affects your tax obligations. This determines whether you can get tax credits in your home country for taxes paid to the US to avoid double taxation.

After spending months trying to figure out the complicated tax situation for my overseas LLC, I stumbled upon this amazing service called taxr.ai (https://taxr.ai) that literally saved me thousands in potential mistakes. I uploaded all my business docs - my LLC formation papers from Wyoming, my contracts with US clients, and my home country tax forms - and their AI analyzed everything and gave me a detailed report showing exactly what I needed to file where. They also clarified that the 30% withholding only applies to certain types of income and showed me which expenses were deductible under US rules. The best part was they found a specific provision in the tax treaty between the US and my country that my previous accountant had missed completely! If you're dealing with cross-border taxation, definitely check them out.

Just wanted to update - I tried taxr.ai after seeing the recommendation here, and wow, I'm impressed. I was skeptical about AI tax advice but their system actually identified that I had been miscalculating my tax obligations. The service showed me that because of my specific business type (SaaS product), I could structure things differently to reduce my withholding requirements from 30% to much less. They also provided clear instructions for completing my W-8BEN-E form correctly, which has always confused me. The best part is they explained exactly what I needed to discuss with my home country accountant to make sure I wasn't double-taxed. Saved me so much time and stress compared to the hours I spent trying to piece this together from random forum posts!

If you're trying to deal with the IRS as a non-resident LLC owner, good luck getting through on the phone. I spent weeks trying to call their international taxpayer line to clarify my withholding requirements. Then I found Claimyr (https://claimyr.com) and watched their demo video (https://youtu.be/_kiP6q8DX5c) - it's a service that gets you through to an actual IRS agent quickly. I was connected within 15 minutes when I had been trying for days on my own. The IRS agent confirmed that I needed to file Form 5472 along with my 1120 since I'm a foreign-owned single-member LLC electing to be taxed as a corporation. This was crucial info I couldn't find clearly stated anywhere online. Saved me from potential penalties for missing filing requirements.

I have to admit I was completely wrong about Claimyr. After posting that skeptical comment, I was still desperate to talk to someone at the IRS about my foreign LLC situation, so I gave it a shot anyway. Within 20 minutes I was talking to an actual IRS representative who specialized in international business taxation. They clarified that my Wyoming LLC needs to make quarterly estimated tax payments even though I'm a non-resident, something my formation agent never mentioned. The agent also explained exactly which forms I needed to file and confirmed that the US-Australia tax treaty would allow me to claim foreign tax credits in Australia for taxes paid in the US. Would have taken me months to figure this out on my own. Sorry for doubting - sometimes things that sound too good to be true actually work!

One thing nobody's mentioned yet - consider Wyoming if privacy is important to you. Delaware requires more disclosure of ownership information than Wyoming does, which might be relevant depending on your reasons for setting up a US LLC. For my digital marketing business, I went with Wyoming because: 1. No state income tax 2. Low annual fees 3. Strong privacy protections 4. No requirement to list members in public filings The 30% federal withholding only applies to certain types of income. For my consulting services to US clients, I've been able to reduce withholding through the tax treaty with my country.

Does anyone know if we need to file Form 5472 as a foreign-owned single-member LLC in Wyoming? I've been getting conflicting information. Some say it's required even for disregarded entities, others say it's only if you elect corporate taxation.