All US corporations are taxable entities and are required to file income tax returns annually, whether or not they have taxable income. The federal corporate income tax rate is 21%. Taxable corporate profits are equal to a corporation’s receipts less allowable deductions. A corporation is able to take tax deductions on business expenses (auto, office, etc.). A corporation can also provide tax free benefits for its employees, such as dental, medical, etc. The corporate tax return ( Form 1120 ) is due by the 15th day of the fourth month following the close of its tax year.

In addition to the federal income tax, most individual US states collect a state income tax. Colorado state income tax rate is 4.63%. Delaware state income tax rates is 8.7%. California state income tax rate is 8.84%.

LLCs are not taxable entities and they are classified as a disregarded entity. Income (loss) is passed through to members, and members pay taxes as individuals on their personal tax returns. They can deduct LLC losses from other sources of income. If members are non-US residents, they are not liable for US taxes for income derived outside of the United States and passive income derived from the United States, such as interest income, dividend income and capital gains. Generally speaking, personal services provided from abroad, selling digital products, web design, and selling physical products from outside the US are not taxable.
All non-residents who own a US LLC or corporation must file a 5472 US tax return with the IRS for disclosure purposes even if you do not owe tax in the US.

The United States has tax treaties with a number of foreign countries. Currently, the US has 65 income tax treaties with countries around the world. These include Canada, China, Germany, Mexico, Poland, Ukraine, Russia, and many more.

As a result, many non-US residents are exempt from US taxes or taxed at considerably reduced rates on income derived from US. Non-resident owners should be aware of the LLC tax implications in their local residence jurisdictions as the income derived from their US LLC may still be taxed in their country of residence.