Hi and welcome to Just Answer!
First of all - if the payment is coming from a foreign source - that is not a foreign earned income
The foreign earned income is the income for serviced performed in a foreign country.
Because all services you personally performed to run that LLC were in the US - that is US earned income.If I returned back to my native country would your answer to above be different
If you will live outside the US and will continue to run your website - all compensation
will be treated as a foreign earned income - regardless if payers are in the US or are abroad.Is there a tax incentive for this, since I am making money for the US from foreign sources? or is it treated as ordinary income?
As an US citizen - you are taxed on all worldwide income. In your situation income derived from a single member LLC - would be considered a self-employment
income - subject of both income and self-employment taxes.
For the person to qualify for the foreign earned income exclusion - he/she should:
-- Work and reside outside the United States for at least 330 days during the year(Physical Presence test), or
-- Meet either the Bona Fide test.
If the person qualifies, he/she may exclude up to $92,900 (2011) in foreign wages. The amount of foreign earned income exclusion for 2012 is $95,100.
Please be aware that - the exclusion above will not affect self-employment taxes - only income taxes. Only earned income is excludable - income from wages and self-employment. For instance - dividends, investment income, rental income, pensions, etc - are not excludable.
If the same income is taxable abroad and in the US - you may claim a credit for taxes paid abroad - so the same income would not be taxed twice. Use the form 1116 - http://www.irs.gov/pub/irs-pdf/f1116.pdf please find instructions here - http://www.irs.gov/pub/irs-pdf/f1116.pdf
The credit is limited by the US tax liability on the same income - the form 1116 is used to calculate the amount of credit. Means - if tax liability abroad is higher - there will not be US taxes on that income, but if tax liability abroad is lower - in the US you will pay the difference after the credit will be applied.
Let me know if you need any help.
Be sure to ask if you need any clarification.