Have a Tax Question? Ask a Tax Expert
Hello and thank you for using Just Answer,If you have an LLC treated as a C Corp, the taxation will not be different at all. The C Corp will file and pay tax on it's income. The CPA would set their own fee. This is normally a hourly rate but I would not be able to advise on a set amount because there is no set amount that a CPA could charge.The rate would not change because the LLC that is treated as a C Corp would be the same. An LLC with at least two members is classified as a partnership for federal income tax purposes unless it files Form 8832 and affirmatively elects to be treated as a corporation. The profit of a corporation is taxed to the corporation when earned, and then is taxed to the shareholders when distributed as dividends. This creates a double tax. The corporation does not get a tax deduction when it distributes dividends to shareholders. Shareholders cannot deduct any loss of the corporation. The corporation would be required to withhold tax on the dividend payments to you.An LLC owned by a husband and wife would be a partnership. Partners pay tax on the income that is passed through to the partners. As Nonresident partners the partnership would be required to withhold tax on any profits before it was passed to each of you. This will require additional work by your US accountant or CPA.
So, if i understood correctly, C-Corps and LLC tht elects to be treated as C-Corps will work the same way in terms of federal income tax and dividend tax withholding. What I dont understand is why tax is withholded if I am a non-resident... Do i need to file a 1040NR each year to get that withholding credited to me or I loss that money every time I get dividends?
It is withheld because you are a Nonresident and the company is a US company. The dividends are taxed normally a 30% this is so unless there is a tax treaty between your home country and the US>
If there is a tax treaty that states the dividends are taxed at a lower rate then you would have to complete the W8BEN form and the C corp would keep that showing the lower rate. This protects the C corp form noncompliance for it's part.
I did not respond to your other post and have left it for any other expert. They will be able to advise that US corp dividends paid to nonUS persons are subject to withholding.
ok, I have used W8-BEN several times before for opening brokerage accoutns and receiving payment for publishing services at my name with 0% tax withholding. Will this work the same way for dividends? How can i see if my country (Uruguay) has a tax treaty with the US?
I will check, one sec please
There is no tax treaty at present between the US and Uruguay, unfortunately.
so i have to pay 30% on dividends
They will be withheld, correct.
The corporation will withhold and remit the amount to the US.
withheld and paid to the IRS on the annual filling, right?
If the dividends are distributed annually, yes.
I suppose that i can also charge the corporations for a management/consulting fee, but perhaps that is a separate question.
It is a separate question but yes you can charge the C copr for your services.
thanks Robin, i will open new questions if i need more info
Those services not performed in teh US would not be taxable to you. That is when you would complete the W8BEN to show you do the work for the US copr but in anothe rcountry.
another country* sorry
but are deductable from the corp income tax, correct?
thanks Robin, we can close this Q.
Your positive rating is always thanks enough.