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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
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Experience:  15years with H & R Block. Divisional leader, Instructor
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| I have couple of questions regarding my current state that

Customer Question

Hi Pearl, | I have couple of questions regarding my current state that I am right now
JA: The accountant will know how to help. Please tell me more, so we can help you best.
Customer: Where should I post my questions?
JA: Is there anything else important you think the accountant should know?
Customer: Well, a lot to be honest!
Submitted: 8 months ago.
Category: Tax
Customer: replied 8 months ago.
Main Question is which type of business company should I choose and in which state?My current state:
- I am non US citizen (my country has a tax treaty agreement with US), don’t reside in US for more than 20 days per year and I am partner in C-Corp (UTAH based) with an US citizen.Here are my questions:
1. I read that if I were to be paid in dividents from the C-Corp there is no tax deduction so the earnings are likely to be double taxed, once by the corporation and then by the owners, is that correct?Should I then simply provide management services, to the C-Corp, and receive payment in form of consulting fees? In that case, can I use my own Sole Member LLC and use to receive the payments for these services, while at the same time as my country has economic tax treaty with US, I won’t need to file and pay income federal tax, right?
==============================Moving forward I want to have my own personal business that I want to run in these specific scenarios (please read and recommend in which state should I open my company):
2. Consulting, Management Services, SEO Services
3. Dropshipping products from China to USA (Process -> buying traffic off of Facebook -> selling on my own store -> customer from US make a purchase -> I go to AliExpress, pay for the product and ask the seller to send it to my US customer)
4. Affiliate Marketing (promoting either physical or digital products and earn commission from the Affiliate website)
5. Have a supplier in the US, who manufactures the product and ship it to Amazon FBA and I then sell it through Amazon on the US market.
6. Can you recommend a good CPA firm that can manage my future accounting?PS - What I’ve read so far regarding my case scenarios:
http://ustax.bz/non-us-entrepreneurs/
http://ustax.bz/amazon-fba-sellers-your-legal-structure-probably-sucks/
https://www.myusacorporation.com/articles/delaware-vs-nevada-vs-wyoming
https://www.myusacorporation.com/articles/us-companies-for-drop-shipping
http://www.justanswer.com/tax/a0izg-robin-partners-new-llc-will.html
http://www.justanswer.com/tax/8na1b-non-resident-alien-owning-llc-doing-business-us.html
Expert:  Robin D. replied 8 months ago.

Hello, I'm Robin. Welcome to JustAnswer. I'm reviewing your question now and typing up my reply. I'll post that in just a few moments.

Expert:  Robin D. replied 8 months ago.

The profit of a corporation is taxed to the corporation when earned, and then is taxed to the shareholders when distributed as dividends. This does in fact create 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.

As far as consulting to the C corp you could do that and use a single member LLC which means all income flows to you as an individual. If you are not in the US performing these services you would not be taxed in the US. The C corp could deduct the payments for your services.

Your last section asks about a CPA firm, I cannot advise or recommend a firm to you as that is against JustAnswer policy.

Customer: replied 8 months ago.
Hi Robin,And thanks for getting back, but your answer is not what I expected.So, to make it clear enough, I am part right now of a C-Corp, but I want to open a company for myself, which may do business like specified in one of these scenarios:2. Consulting, Management Services, SEO Services
3. Dropshipping products from China to USA (Process -> buying traffic off of Facebook -> selling on my own store -> customer from US make a purchase -> I go to AliExpress, pay for the product and ask the seller to send it to my US customer)
4. Affiliate Marketing (promoting either physical or digital products and earn commission from the Affiliate website)
5. Have a supplier in the US, who manufactures the product and ship it to Amazon FBA and I then sell it through Amazon on the US market.What company should I open for myself either Sole owner LLC or what based on the above info.Looking forward to hearing from you
Expert:  Robin D. replied 8 months ago.

If you want the profit to not be taxed in the US then stay with the entity that is passing all reporting to you as an individual. That would be as a sole proprietor or single member LLC. Both of those in the US pass all profit to the individual and as I stated, if you are not in the US and have no presence in the US you are not taxed in the US.

Dropping from China and not using any US company ti send teh actual goods protects you also form sales tax in the US.

Customer: replied 8 months ago.
Which state should I form the single member LLC?I read that article that Wyoming is the best option - https://www.myusacorporation.com/articles/delaware-vs-nevada-vs-wyoming , but I am looking for a confirmation.Thanks
Expert:  Robin D. replied 8 months ago.

I have read those too that say which is the best. I can tell you that most non residents I have dealt with chose Delaware.

Customer: replied 8 months ago.
Hi Robin,And thank you so far for your support. It's helpful already.1. And again, do you recommend me to create a single member LLC and use it to avoid being taxed in the US?2. Also, do you recommend me being part of the C-Corp with a future LLC instead of me personally as individual?3. So, Delaware over Wyoming at the end, right?Thanks
Expert:  Robin D. replied 8 months ago.

If you are a shareholder of the C corp you do not change that just by providing services to the C corp.

If you want to have this association with US selling to US person then a sole proprietor or single member LLC would mean no tax for you.

Customer: replied 8 months ago.
I am a shareholder owning 50% of the C-Corp company, but still haven't taking any money off of it, so this is why I am asking now of what is the best way for me to get paid from the C-Corp?And should I stay as individual in the C-Corp or put myself with my future Single member LLC?Thanks
Expert:  Robin D. replied 8 months ago.

That is fine and they can pay you if you are providing services but if they pay you dividends that is tax because it is a US corp.

Customer: replied 8 months ago.
I know I may sound boring, but why do most of your non residents choose Delaware over Wyoming? I am just trying to figure it out.
Expert:  Robin D. replied 8 months ago.

I never asked them. I do not favor one over the other nor do I advise on one specifically.

Customer: replied 8 months ago.
Hi Robin,Hope you had a great weekend. I wanted to ask as well, which top 5 US Banks do you recommend for online entrepreneurs?Thanks
Expert:  Robin D. replied 8 months ago.

I do not and am not allowed to recommend or endorse any specific business. That is JustAnswer policy.

A positive 5 star rating is appreciated so I get credit for the response.

Customer: replied 8 months ago.
Would mind me asking for a good place where I can form my LLC (website, company or service) if you can recommend one?Thanks
Expert:  Robin D. replied 8 months ago.

There is a site called Legalzoom that has all the forms.