US Tax Filing for Business Owners Living Abroad
Running a US LLC or S-Corp while living outside the United States adds significant complexity to your tax situation. Your business entity files its own return, your personal return must reconcile pass-through income with expat exclusions and credits, and FBAR may apply to both personal and business foreign accounts. We handle the full stack: Expat personal return plus the business entity filing.
Is this for me?
- US LLC or S-Corp owner living abroad
- Self-employed operating through a US entity while in another country
- Receiving K-1 pass-through income alongside foreign-earned income
- Concerned about reasonable compensation requirements for S-Corps
- Managing foreign bank accounts for both personal and business use
Why this is complex
- FEIE and pass-through business income interact in non-obvious ways
- SE tax is not eliminated by FEIE, a common costly misconception
- S-Corp 'reasonable compensation' rules are especially important for expats
- Both the entity and you personally may have separate FBAR obligations
- Some foreign countries treat US LLC income differently than the US does
Recommended plans
- ✓Everything in Premier
- ✓Foreign Earned Income Exclusion (Form 2555)
- ✓Foreign Tax Credit (Form 1116)
- ✓FBAR filing (FinCEN 114) included
- ✓LLC partnership return (Form 1065)
- ✓Up to 2 owners, simple P&L and balance sheet
- ✓K-1s prepared for owners
- ✓S-corp return (Form 1120-S)
- ✓Up to 2 owners, simple P&L and balance sheet
- ✓K-1s prepared for owners
- ✓Reasonable compensation guidance
What’s included
Frequently asked questions about US Tax Filing for Business Owners Living Abroad
Does FEIE apply to income from my LLC?
It depends on your LLC structure. A single-member LLC disregarded for tax purposes means the income flows to your personal return, if it's earned income and you qualify for FEIE, it may be excludable. S-Corp distributions are not earned income and don't qualify for FEIE. Reasonable salary from an S-Corp does qualify. We model this carefully.
Do I still pay self-employment tax as an expat LLC owner?
Yes. FEIE reduces your income tax but does NOT eliminate self-employment tax. SE tax (15.3% on net profit) still applies to expat sole proprietors and LLC members. This surprises many expat business owners. Structuring as an S-Corp with reasonable compensation can reduce SE tax exposure.
My LLC has a foreign bank account, does it need its own FBAR?
Possibly, FBAR applies to 'US persons', which includes US entities (LLCs, corporations). If your LLC holds foreign bank accounts exceeding $10,000, an FBAR must be filed for the entity, separate from your personal FBAR. We handle both.
Can you file both my personal expat return and my LLC/S-Corp return?
Yes. Our business add-on packages are designed to sit alongside a personal Expat return. The LLC add-on ($399) covers Form 1065; the S-Corp add-on ($499) covers Form 1120-S. Both include K-1 preparation for the owners.
Related tax guides
How FEIE applies (and doesn't) to LLC and S-Corp pass-through income, and the SE tax trap.
Why your LLC may need its own FBAR separate from your personal filing.
Behind on returns as a business owner? The IRS Streamlined Procedure can help catch up with penalties waived.
