Owning a business overseas has multiple advantages but also brings about a unique set of challenges, especially from a US tax perspective. For American expat entrepreneurs, there are tax implications with every decision, from how you structure your business to how you pay your employees. Where you are in business, whether there is a Tax Treaty and/or Social Security Agreement between your host country and the USA, and where your employees are located will all have an impact on your business taxes. In addition to the federal tax filing requirements, you must also consider the possibility of paying US payroll taxes and Social Security which would be required quarterly. Even if your business operates 100% outside the USA, you may still need to file informational reports to the IRS such as Form 5471, which is required for anyone who owns 10% or more of a foreign corporation.
There are a host of resources on our site outlining the different tax issues relating to your business, written by our expert expat tax professionals. Our goal is to help you understand your tax obligations and help you maximize deductions and minimize your tax liability. With the additional reporting requirements comes the opportunity to make additional mistakes and one of our expat tax professional can be an invaluable resource. If you would like Greenback to prepare your business’ expat tax return, get started here!
Frequently Asked Questions
American expat entrepreneurs and business owners have many questions about how owning a business will affect their US expat taxes. Being self-employed certainly changes your tax obligations, especially if all your income is actually US-sourced. Thankfully our CPAs and IRS Enrolled Agents have your answers.
- Does being self-employed change US expat tax obligations?
- If all of my income is from the US and I am living entirely abroad, how does the tax return process work?
- Do I need to pay Social Security or FICA taxes if I run my own business overseas?
- Do I need to pay estimated taxes?
- What is the threshold for filing if I am self-employed?
Services
American expat entrepreneurs must file both individual and business expat tax returns. One of the most important forms business owners may need to file is Form 5471, which must be filed by anyone owning 10% or more of a foreign corporation. You may also benefit from a consultation with one of our CPAs or IRS Enrolled Agents to discuss your specific business structure and tax responsibilities. The pricing for these services is as follows:
- Federal Tax Return – $485
- FBAR – $95 (for up to 5 accounts)
- Small Business Tax Returns – $485
- Form 5471 – $485
- Consultations – $150 per 30 minutes
Planning Tips and Tricks
Below you will find some of the top tax resources for American expat entrepreneurs! If you need even more detailed information, we have a comprehensive blog library to help you better understand US expat taxes from a business perspective. From business structures to allowable deductions, you now have the most up-to-date tax information at your fingertips!
- Self-Employment and Your Taxes – What does it mean to be self-employed and how does it affect your taxes?
- The Ins & Outs of Estimated Taxes – Depending on your business structure, you may need to pay estimated taxes.
- Structuring Your Business – Not sure how to structure your US based business? Learn about the various options for US business structures here.
- Form 5471 for Foreign Business Ownership – Who must file this form and what does that entail? Check out this article.
- Work from Home Deductions – If you work from home, you may be able to deduct a host of expenses to lower your taxable income.
