Income Tax

General Information

Income Tax for C-Corp

Income Tax for S-Corp

Income Tax for an LLC

Every company legally incorporated in the United States must declare income tax, regardless of whether or not it has foreign partners, or whether it does not operate within the country.

Income Tax is a federal tax that is calculated on net profit during a fiscal year. This tax is declared annually, according to the declaration dates corresponding to each type of company.

Prodezk is your company's ally in the United States. Our team of professionals will be in charge of filing taxes. Contact us for more information.

C-Corporations file and pay this tax as a company.

The tax charge is calculated with a fixed rate of 21% on the value of the net profit of the company in its last fiscal year.

Additionally, when the company declares dividends, it has the obligation to withhold the shareholder and pay said withholding to the IRS, for dividends declared, as follows:

For foreigners, without tax residence in the United States and residents in countries where there is no double taxation agreement, 30% of the decreed dividends must be withheld.
For residents, companies and foreigners in countries that have a double taxation agreement, 21% of the decreed dividends must be withheld.

‍IMPORTANT: If you are a foreign natural person, you should not file your personal return if your only income for the tax period was from dividends.

These companies are taxed on a personal basis, it means, the taxes are the responsibility of the partner who owns the company, similar to an LLC.

On the global profit of the company, and based on this value, different percentages will be applied ranging from 10% to 37%.

Remember that the partners of an S-Corp can only be American residents.

For more information on the structure of an S-Corp, click here.

LLC companies are taxed on a personal basis. It means that the taxes are the responsibility of the partner who owns the company.

On the global profit of the company, and based on this value, different percentages will be applied ranging from 10% to 37%.

It's also important to take into consideration the following:

To make the personal declaration, foreign partners must have an individual taxpayer identification number (ITIN) before making said declaration.
When the company has of 2 or more members, it is taxed as an LLC partnership. In this case, you should bear in mind that if you are a foreigner, on your participation in the global profit of the company, you will have to pay a retention of 37%. Later, you can deduct this withholding in the personal tax return. Keep in mind that if you have a credit balance, the IRS will issue a check returning this value.
For more information on the structure of an LLC, click here.

Important Filing Dates

Knowing your obligations in the United States reduces the risk of incurring penalties and interest for non-compliance.These are the dates that you must take into account to keep your company in order.

LLC

For LLC Partnerships the declaration must be presented before March 15th and for LLC Disregarded before June 15th.

C-CORP

The company's declaration must be presented before April 15th. The personal tax returns must be presented before June 15th.

S-CORP

The owners or shareholders of this type of business must present the income tax declaration before March 15th.

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Tax calculator

We know that your company's accounting is a pillar for its proper functioning.

This is why with the following tool you can obtain the tax rate to pay related to the expected profits of your company.

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Frequently Asked Questions

How is the tax withholding refund made?

After filing the tax, in case you have an amount in favor of the initial withholding paid, the IRS will issue a check or credit to the bank account associated with the members of the company. Contact us for more information.

Does the tax withholding apply to American citizens?

No, the withholding is charged only to foreign partners of an LLC Partnership.

Is there a tax extension in case I can't file before the stipulated date?

Yes, the tax extensions may vary according to the type of company. However, the penalties and interest will continue to run from the first declaration date. You can contact us for more information.

What happens if the tax return and payments are not made on time?

The federal entity can calculate the estimated value of the taxes and send the formal requirement. It also can charge interests and penalties to people who pay taxes late and file lawsuits against tax evaders. If you don't agree with the requirement, you must file an appeal.

Do the foreign partners of a Corporation have to pay a withholding just like partners in an LLC?

For foreign partners of a Corporation, without tax residence in the United States and residents in countries where there is no double taxation agreement, 30% of the decreed dividends must be withheld

For residents, companies and foreign partners of a Corporation in countries that have a double taxation agreement, 21% of the decreed dividends must be withheld.