Non US resident with a US LLC - tax implications for remote software engineer

Thanks for the detailed response! I'm still confused about the "effectively connected income" part. If my LLC is registered in Wyoming but I'm doing all the work from Australia, does that still count as effectively connected to US trade? Also, does it matter that my clients are all US-based?

ECI is determined by whether the income is connected to activities conducted within the US. If you're performing all the work in Australia for US clients, that income generally isn't considered effectively connected income, even though your clients are US-based. What matters most is where the economic activity (your work) is taking place. The fact that your clients are US-based doesn't automatically make your income US-sourced. However, the LLC structure adds complexity. You'll still have filing requirements for the LLC itself, including potential state requirements depending on where it's registered, plus foreign owner reporting with Form 5472 and potentially a protective Form 1120.

How does it work exactly? Do they connect you with tax professionals or is it more like an automated system? I'm in a similar situation (Canadian with Wyoming LLC) and I'm drowning in conflicting advice.

I'm skeptical about AI tax tools for international situations. How can they possibly keep up with tax treaties and international law changes? Did they actually help with the filing or just give advice?

They use advanced document analysis to review your specific situation and provide detailed guidance. It's not just generic advice - the system analyzes your actual business structure, revenue sources, and work locations to determine tax obligations. They provided me with extremely specific guidance tailored to my Australian-US situation. Their system specifically addresses international tax treaties and maintains current information on bilateral agreements. They don't file for you directly, but they provide comprehensive documentation that either you or your accountant can use to ensure accurate filing. My accountant was actually impressed with the level of detail in their report.

Wait, how is this even possible? The IRS international line is impossible to get through to. Is this service just setting up callbacks or something? Seems too good to be true.

This sounds like a scam. Nobody can magically get through IRS queues. They probably just connect you with some "tax expert" who isn't actually from the IRS. I'll believe it when I see actual proof.

It's not magic - they use a combination of technology and timing to navigate the IRS phone tree and stay on hold for you. When an agent becomes available, they call you and connect you directly to that IRS agent. It's 100% the actual IRS you're speaking with. They don't set up callbacks - the IRS international department rarely offers that option anyway. They basically wait in the queue so you don't have to. I specifically asked the IRS agent I spoke with to confirm they were actually from the IRS (because I was skeptical too), and they confirmed they were an official IRS employee at their international tax center.

This is so important! Can you share which states are better for international owners? I'm thinking about moving my LLC from New York because I heard they're really aggressive with non-resident owners.

Wyoming, Florida, and Nevada are generally considered the most favorable for non-resident LLC owners. They have no state income tax and minimal reporting requirements. Delaware has advantages for certain business structures but still has franchise taxes. Definitely avoid California, New York, and Massachusetts if possible - they're notorious for aggressive tax positions with non-resident owners. I moved from California to Florida specifically because CA wanted to tax income I earned while physically in Brazil, claiming my LLC created sufficient nexus despite me never setting foot in California that year.

Wait, I thought FDII only applied to US corporations selling to foreign clients. In my case, I'm a foreign person (non-US) with a US LLC serving US clients. Would FDII still apply? This seems like the opposite situation.

You're absolutely right to question this! FDII is specifically designed for US corporations (or LLCs electing corporate tax treatment) that derive income from serving foreign markets with intangible property. Since you're serving US clients, your income would be considered US-sourced, not foreign-derived. FDII wouldn't apply to your situation at all. Additionally, as a single-member LLC owned by a non-US person, you're likely being treated as a disregarded entity anyway, which means corporate tax provisions like FDII wouldn't be relevant unless you specifically elected corporate tax treatment with Form 8832.