Three layers, one of them punitive
Federal & State Tax Compliance in the United States
US income tax can apply at federal, state and sometimes city level. A separate filing catches foreign owners hardest.
GCC business setup specialists
The information return is the real trap
A foreign-owned single-member LLC generally has no entity-level tax, which leads owners to assume there is nothing to file. In fact a specific federal information return is required, attached to a return the entity otherwise would not file, and the penalty for not filing it is substantial and applies per year even with no income or activity. We have seen that penalty assessed against dormant companies.
- Every filing obligation identified, including the dormant-company one
- The three income tax layers mapped for your footprint
- Deadlines and estimated payments calendared properly
20+
Mainland, free zone and offshore jurisdictions we file in — so the recommendation is based on your activity, not on which authority we happen to be registered with.
7,000+
Companies successfully established.
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What applies
Layers and filings
Entity type and footprint decide them.
| Layer | Position |
|---|---|
| Federal income tax | Corporations taxed at entity level; LLCs generally not. |
| State income tax | In each state with nexus; some states levy none. |
| City income tax | In a minority of cities. |
| Foreign-owner information return | Required; heavy penalty for failure. |
| Estimated payments | Quarterly, where liability is expected. |
| Withholding on payments abroad | Can apply; treaty relief possible. |
Rates, nexus rules, apportionment, information return requirements and penalties are set by federal and state authorities and change. We handle US formation and compliance set-up and co-ordinate with a US tax adviser where advice is needed. We do not give US federal or state tax advice, and any adviser offering US tax conclusions as part of a formation package should be treated with caution.
How it works
Getting compliance right
Identify every filing, then calendar it.
01
Identify the filings
Entity type, ownership and footprint mapped to the federal, state and local returns actually required — including the ones a dormant company still owes.
02
Register and calendar
Registrations completed where needed and every deadline diarised, including estimated payment dates.
03
File through your preparer
Books delivered in a year-end package and filings co-ordinated with a US tax preparer.
- Entity type and any tax election made
- Ownership, including whether any owner is non-US
- Whether the entity is single-member
- States where you have employees or property
- States where you hold inventory
- Expected revenue by state
- Fiscal year end
- Payments made to non-US persons
- Related-party transactions with the owner
- Whether the entity is dormant
- Prior returns filed
- Any notices received from tax authorities
Scope
What is included, and what is not
Stated plainly, so nothing is added once the engagement starts.
Included in the service fee
- Identification of every required filing
- Foreign-owner information return obligations flagged
- State nexus assessment
- Registration where required
- Deadline and estimated payment calendar
- Year-end package for your tax preparer
- Co-ordination with a US tax adviser
- Guidance where prior years are unfiled
Not included, quoted separately
- Taxes and penalties, paid at cost
- US federal and state tax advice
- Tax return preparation unless quoted
- Representation before tax authorities
- Transfer pricing studies
- Treaty position opinions
- Personal returns for owners
- Sales tax filings unless quoted
Verify independently
Relevant US authorities
We file directly with these bodies on your behalf.
Secretary of State of the state of formationInternal Revenue ServiceState departments of revenueCounty and city licensing officesRegistered agent in each stateState professional licensing boards
Questions
US tax compliance — FAQs
My LLC has no income — do I still file?
Very likely yes. A foreign-owned single-member LLC generally must file a federal information return regardless of income, and the penalty for not doing so is substantial per year.
How much is the penalty?
It is a fixed, significant amount per year of failure, and it is assessed even where there was no activity. It is the single most expensive mistake foreign owners make here.
What is state nexus?
The connection that obliges you to file in a state — typically people, property, inventory or sustained sales there. It is assessed state by state.
Are there really city income taxes?
In a minority of cities, yes, as a third layer on top of federal and state. We identify whether any apply to your locations.
Do you prepare US tax returns?
We identify the obligations, keep the books and co-ordinate with a US tax preparer. We do not give US tax advice ourselves.
Go deeper
More United States services
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At Black Swan Business Setup Services, our mission is simple: to empower entrepreneurs and companies of all sizes to establish and expand their presence in the UAE, Oman, Saudi Arabia, Bahrain, and beyond.
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