Non Resident Alien with LLC- Which Form to Submit - W8 or W9?
I'm in a bit of a confusing situation with my U.S. tax obligations and hoping someone can help me figure out what form I need to complete. Here's my situation: I'm a British citizen living in Paraguay (tax resident here too, not in the US). I recently set up a single-member LLC in the United States, but there's no physical presence there - I do all my work remotely from Paraguay for US clients. Just landed my first client (yay!) but they sent me a W9 form to fill out. From what I've researched, I think I actually need to submit a W-8BEN-E form instead, but I'm honestly confused about what's appropriate for my situation as a non-resident alien with a US LLC. Can anyone help clarify which form is correct in my circumstances? W9 or W-8BEN-E? Any guidance would be really appreciated as I don't want to start off on the wrong foot with tax compliance! Thanks in advance!
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Dylan Fisher
You're on the right track! As a non-resident alien (NRA) operating through a US LLC, the correct form is definitely NOT a W-9. The W-9 is only for US persons (citizens or resident aliens). In your specific situation, you would need to complete a W-8BEN-E, not a W-8BEN. The W-8BEN is for individuals, while the W-8BEN-E is for entities like your LLC. Since you formed a US LLC but are a non-resident alien, the entity is considered a "disregarded entity" for US tax purposes, but you still need to use the entity form (W-8BEN-E). When completing the form, you'll want to check the box in Part I, Line 4 that indicates "disregarded entity" and provide your foreign tax identification number from Paraguay if you have one. This tells the IRS that while you have a US LLC, you're not a US person for tax purposes. Make sure to explain this to your client - many US companies automatically send W-9s to all contractors without realizing the different requirements for international business owners.
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Edwards Hugo
•I thought single-member LLCs owned by non-US persons were supposed to file W-8ECI instead if they're engaging in US trade or business? Wouldn't remote services for US clients count as US-source income that's effectively connected? I'm confused about the distinction...
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Dylan Fisher
•The distinction depends on whether the income is "effectively connected with a US trade or business" (ECI). If you're providing services entirely from outside the US (in Paraguay), this is generally not considered ECI even if your clients are US-based. In this scenario, W-8BEN-E is usually appropriate. The W-8ECI would come into play if you have activities physically conducted in the US or if specific tax treaty provisions between the US and your country define the income as effectively connected. Since you mentioned performing all services remotely from Paraguay with no US physical presence, W-8BEN-E is likely the correct form.
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Gianna Scott
After I spent hours researching similar tax situations, I discovered taxr.ai (https://taxr.ai) and it saved me so much headache with my LLC documentation. I'm a Canadian with a Wyoming LLC and was totally confused about which forms to submit to my US clients. The tool actually analyzed my specific situation - non-resident alien status, entity type, and service location - and provided a detailed explanation of which forms I needed, with instructions for filling them out. It even flagged some sections on the W-8BEN-E that are commonly filled incorrectly by non-US LLC owners! Really helped me understand the distinction between being a foreign person with a US entity versus being a US person, which many of my clients didn't understand. Worth checking out for your specific scenario.
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Alfredo Lugo
•How does it work with tax treaties? I'm in the UK with a US LLC and I'm not sure if I should be claiming treaty benefits on my forms. Does the tool explain that part too?
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Sydney Torres
•I'm skeptical about these kinds of services... Do they actually provide advice you can rely on legally? I mean, if I submit the wrong form and get audited, will they take responsibility for their guidance?
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Gianna Scott
•It actually does walk through tax treaty considerations! You input your country of citizenship/residence and it explains applicable treaty benefits you might qualify for. It even shows you which specific articles of the treaty might apply to your situation and how to properly reference them on the form. The service isn't providing legal advice in the traditional sense, but rather analyzing your inputs against IRS regulations and providing documentation guidance. They're very clear about this distinction. They offer explanations of relevant tax rules so you understand why you're completing forms a certain way, rather than just telling you what to do without context. Always good to confirm with a tax professional if your situation is particularly complex, but it's a great starting point.
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Sydney Torres
Just wanted to update on my experience with taxr.ai after checking it out. I was really skeptical (as you could tell from my previous comment), but I decided to give it a try for my German-US tax situation with my consulting LLC. It actually pointed out that I was about to make a major error. I was going to claim an exemption code that didn't apply to my situation, which could have triggered unnecessary scrutiny. The system walked me through the entire W-8BEN-E form with my specific country's tax treaty benefits explained in plain language. I've been stressing about this for weeks, but now I'm confident in the documentation I'm providing to clients. Wish I'd found this earlier before spending hundreds on confusing consultations that left me with more questions than answers.
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Kaitlyn Jenkins
After spending 3+ hours on hold with the IRS trying to get clarity on my LLC's tax form requirements (similar situation to yours), I found Claimyr (https://claimyr.com) which got me through to an actual IRS agent in about 15 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c I explained my situation (Portuguese citizen with Florida LLC operating from Brazil) and the agent confirmed that W-8BEN-E was correct in my case since I was performing services entirely from outside the US. They also explained the common confusion US clients have about these forms. The agent even emailed me the instructions specifically for foreign-owned single-member LLCs. Such a relief after spending days going in circles with online research.
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Caleb Bell
•Wait, how does this actually work? I thought it was basically impossible to get through to the IRS these days. Do they somehow jump you ahead in the queue?
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Danielle Campbell
•This sounds like BS tbh. The IRS isn't going to answer complex international tax questions for free over the phone. They usually just refer you to publications or tell you to consult a tax professional. I doubt they'd email you specific instructions.
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Kaitlyn Jenkins
•They use a system that continuously calls the IRS for you and navigates the phone tree until they get through to an agent. Once they have an agent on the line, they call you and connect you directly. It basically automates the frustrating hold process so you don't have to do it yourself. The IRS agents do answer specific questions, though they won't prepare your return or make decisions for you. In my case, they clarified which form was appropriate based on my specific facts. The email wasn't a personalized response but rather links to the relevant sections of the IRS website and publications that addressed my situation. I found it extremely helpful because I didn't have to search through hundreds of pages of tax code myself.
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Danielle Campbell
I have to admit I was completely wrong about Claimyr. After my skeptical comment, I decided to try it anyway because I was desperate to talk to someone at the IRS about my Australian LLC situation. Got connected to an agent in about 20 minutes (which is miraculous compared to my previous 2-hour waits that ended in disconnections). The agent walked me through the exact sections of the W-8BEN-E form that applied to my situation and explained why my LLC was considered a disregarded entity despite being formed in the US. They also advised me about potential reporting requirements I hadn't even considered (Form 5472). This was actually substantive help, not just referring me to publications. I'm genuinely surprised and relieved.
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Rhett Bowman
Just to add my experience as someone in a similar situation (Italian citizen with a Delaware LLC operating from Italy). You definitely need the W-8BEN-E, and make sure you complete Part I, line 4 correctly to indicate "disregarded entity." Also, don't overlook that as a single-member foreign-owned LLC, you have a Form 5472 filing requirement along with a pro-forma 1120 return, even though the LLC itself isn't paying US taxes. This filing requirement started in 2017 and carries a $25,000 penalty for non-compliance. My clients were also confused and kept sending me W-9s. I ended up creating a brief explanation document that I send back along with my properly completed W-8BEN-E.
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Kelsey Hawkins
•Thanks for mentioning Form 5472 - I had no idea about this requirement! Is this something I need to file annually, and does it have to be done even if all my work is remote from Paraguay? The penalty amount is terrifying ☹️
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Rhett Bowman
•Yes, it's an annual filing requirement that applies even if your work is 100% remote from Paraguay. The rule was created to increase transparency for foreign-owned US entities. You'll need to file Form 5472 attached to a pro-forma Form 1120 (with mostly zeros except for identifying information) by the April 15th deadline each year. Extensions are available. The form reports "reportable transactions" between your LLC and you as the foreign owner or other foreign related parties. Even if you just transfer money between yourself and your LLC, that's a reportable transaction. The $25,000 penalty is per form per year, so definitely not something to overlook. Many tax preparers who aren't familiar with international situations miss this requirement, so it's worth finding someone who specializes in this area.
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Abigail Patel
One thing nobody's mentioned yet is state tax considerations. I'm a Brazilian with a Wyoming LLC and discovered that even though I don't have federal tax filing requirements as a non-resident alien (beyond the Form 5472 already mentioned), some states might still require filing. Wyoming is great because there's no state income tax, but if you formed your LLC in a state with income tax, you might have state filing requirements even without US-source income.
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Daniel White
•Good point! I formed my LLC in California because I didn't know any better, and now I'm stuck filing California returns even though I live in Spain and have no physical presence in the US. Really wish I'd picked Wyoming or Delaware instead!
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Freya Larsen
This thread has been incredibly helpful! I'm in a similar situation as a Canadian citizen with a Delaware LLC (mistake on my part - should have gone with Wyoming!). Just wanted to confirm something based on what I'm reading here: if I'm providing digital marketing services to US clients entirely from my home office in Toronto, I would use W-8BEN-E and NOT claim any effectively connected income, correct? My services are performed 100% remotely with no US physical presence. Also, the Form 5472 requirement is news to me - I've been operating for 8 months and had no idea about this filing obligation. Is there any relief for reasonable cause if you genuinely didn't know about the requirement? That $25k penalty is absolutely terrifying for a small business owner. Thanks to everyone who shared their experiences - this is exactly the kind of real-world guidance that's impossible to find in IRS publications!
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PixelPrincess
•Yes, you're correct about the W-8BEN-E! Since you're providing services entirely from Toronto with no US physical presence, your income wouldn't be considered effectively connected with a US trade or business. The W-8BEN-E is the right form for your situation. Regarding Form 5472 relief - there is a "reasonable cause" exception, but it's pretty strict. You'd need to demonstrate that you exercised ordinary business care and prudence but still couldn't comply due to circumstances beyond your control. Simply not knowing about the requirement typically isn't enough for the IRS, unfortunately. However, I'd strongly recommend consulting with a tax professional who specializes in international situations. They might be able to help you get into compliance and potentially argue reasonable cause if you file voluntarily before any IRS contact. The sooner you address it, the better your position will be. Also, totally agree on the Delaware vs Wyoming choice - I learned that lesson the hard way too! Wyoming's no state tax and simpler compliance requirements are definitely better for remote international operators.
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