How Do I Calculate the Taxes on My US LLC as a Non-Resident?

The calculation starts with one question, not a tax table: is the income effectively connected (ECI) to a US trade or business, or is it foreign-source? ECI is taxed at the same graduated rates as a US person's return, on a net basis after deductions. Income that is not ECI, earned from abroad with no US office or staff, is frequently not taxed by the US at all, even though the company is a US LLC.

That single distinction decides almost everything else: whether you owe anything, what form you file, and whether the 30% withholding rate applies. Here is how to actually work through it.

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01What Is the First Number You Need: ECI or Not?

The first number is not a dollar figure, it is a yes or no: does the business have a real US presence? A US office, US-based staff, US inventory, or work regularly performed on US soil points toward effectively connected income. A non-resident running consulting, software, or e-commerce entirely from their home country, with no US office and no US employees, usually has no ECI, and no ECI on that income means no US federal income tax on it.

This surprises a lot of owners, because the LLC itself is American. The tax code follows the activity, not the paperwork: a US entity with zero US-connected activity can legitimately owe zero US income tax.

02How Do You Calculate the Tax If It Is ECI?

If the income is ECI, you calculate it the same way a US person would: gross revenue, minus allowable business deductions, run through the graduated federal brackets that top out at 37%. Because a single-member LLC is disregarded for tax purposes, that net number flows straight onto your own Form 1040-NR, not a separate business return.

One detail non-resident owners consistently miss: the standard deduction that a US person takes for granted is generally not available to a nonresident alien. Deductions have to be itemized and tied directly to the business, which is exactly why keeping clean records from day one changes the final number.

What If the Income Is Not ECI, but Still US-Source?

US-source passive income that is not ECI, interest, dividends, royalties, and some rents, is FDAP income, taxed at a flat 30% withheld at the source rather than the graduated brackets. A tax treaty can lower that rate, but most Latin American countries do not have an income tax treaty with the US, so 30% is the number most LATAM founders should actually plan around.

03Do You Owe Self-Employment Tax on Top of That?

Usually not, and this is the number most non-resident owners never hear. The 15.3% self-employment tax that a US citizen or resident pays on business profit generally does not apply to a nonresident alien's distributive share, even when that share is effectively connected income. It is one of the few places the math works in the founder's favor.

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04What About State Tax, Separate From the IRS?

State obligations run on their own track and do not depend on the ECI answer at all. Every LLC owes its state's annual report fee and, in states that charge one, a franchise tax simply for staying registered: a flat $300 in Delaware, an $800 minimum in California, near zero in Wyoming. That bill arrives whether the federal side owes anything or not.

05So What Does the Full Calculation Actually Look Like?

Take two founders with the same Delaware LLC. One sells software built and delivered entirely from home, no US office, no US staff: no ECI, no federal income tax, no self-employment tax, just the $300 Delaware franchise tax. The other runs Amazon FBA with inventory sitting in a US warehouse: that US presence creates ECI, so net profit is taxed at graduated federal rates, still with no self-employment tax, plus the same $300 franchise tax. Same entity type, same home country, two very different federal bills, because the activity, not the LLC, decided the outcome.

1. 01Determine whether the activity creates ECI (US office, staff, inventory, or work performed on US soil).
2. 02If it is ECI, calculate net income and apply the graduated brackets on Form 1040-NR.
3. 03If it is US-source but not ECI, apply the 30% FDAP withholding, or a lower treaty rate if one exists.
4. 04Confirm foreign-source income with no US nexus, which is typically outside US tax entirely.
5. 05Add the state's flat annual report fee and franchise tax, which apply regardless of the federal answer.

06How Does Prodezk Calculate This for You?

For 24 years we have run this exact calculation for founders who would rather get a straight answer than guess. We review where the work actually happens, determine the ECI question correctly the first time, and prepare the Form 1040-NR and any state filings so the number you plan around is the real one. Begin here and an advisor walks through your specific activity before you file anything.