Today TaxMama® hears from Amaq in the TaxQuips Forum, with this question. “We sell a B2B software all over the world. We are based in Pakistan. Many of our clients are from USA so we want to register an LLC in either Wyoming or Delaware. We do not have any physical presence in US, nor will be hiring any regular employees for now (currently looking for commission based and virtual employees only). Would you kindly provide various tax rates such as Federal etc., applicable to us, if any, considering we have never been physically present in USA? We are processing payments via 2Checkout service and our annual revenue is less than $50,000.
If you register a company in the US, and you set up a bank account or merchant credit card account in the US to receive the funds, you HAVE EARNINGS IN THE US.
All your sales, less expenses, will be taxed here for federal (national) tax purposes.
I am not clear why you need to register a presence in the US at all. Your business is doing fine without it. I urge you to avoid the extra tax complications unless you have a really good reason.
You asked about the rates. As an LLC, you need to select a way to file your taxes.
You cannot file as a US individual or a US partnership, or an S Corp, since those al require you to have Social Security numbers (in essence).
So your only choice for reporting is as a C Corporation. (That’s a regular corporation.) Here is a schedule of the tax rates for C Corps. So if you do want to set up that LLC, this will help you decide if the costs are worth it.
And remember, you can find answers to all kinds of questions about LLCs and other tax and business issues, free. Where? Where else? At www.TaxMama.com.[Note: If you were subscribed to the e-mailed version of TaxQuips, you’d be getting other exciting news and tips by e-mail, that never appear on the site. Please click on the join TaxMama.com link – it’s free!]
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