Bookkeeping for a foreign-owned single-member US LLC

If you live outside the US and own a single-member US LLC, the IRS usually does not want an income tax return from the LLC itself. It wants something else: a record of every transaction between the LLC and you. That record goes on Form 5472, attached to a mostly empty Form 1120, every year.

This guide covers what the rule is, what you need to record, and a monthly habit that makes year-end a matter of hours rather than days. It assumes a calendar tax year and an LLC that never elected to be taxed as a corporation.

Why the IRS treats your LLC as a corporation for one purpose

By default, a single-member LLC is a “disregarded entity”: for income tax, the IRS looks through it to the owner. That stays true for a foreign owner.

Since 2017, though, a US entity that is wholly owned by one foreign person and otherwise disregarded is treated as a separate domestic corporation for the limited purposes of IRC §6038A (Treas. Reg. §1.6038A-1(c)(1)). Section 6038A is the rule that makes 25%-foreign-owned US corporations report their dealings with related parties. A foreign-owned single-member LLC is, by definition, 100% foreign-owned, so it becomes a “reporting corporation”. The rule applies to tax years beginning after December 31, 2016 and ending on or after December 13, 2017.

Two consequences follow:

• The LLC must file Form 5472 for every year in which it has a reportable transaction with a related party, and you, the owner, are always a related party.
• The LLC must keep books good enough to show those transactions are reported correctly.

None of this changes who pays income tax. Whether you owe US tax on the LLC’s profit depends on whether the business has income effectively connected with a US trade or business, which is a separate question for you and your accountant. Your home country may tax the profit as well.

Who counts as a foreign person

Anyone who is not a US person: an individual who is not a US citizen, not a green card holder and not a US resident under the substantial presence test, or a company formed outside the US. A US citizen living abroad is not a foreign person. The 25% ownership tests count indirect ownership too, under the attribution rules of IRC §318 as modified by the regulations. If you hold the LLC through another company or a trust, have an accountant confirm who the “foreign owner” is.

Not sure whether your company is in scope? The Form 5472 checker asks four or five questions and errs on the side of “ask an accountant”.

What a reportable transaction is

For a foreign-owned disregarded LLC, two kinds of transactions are reportable:

Kind	Examples	Where it goes on Form 5472
Monetary transactions with a related party	Sales, services, licence fees, rent, loans and their interest, other amounts paid or received	Part IV
Any other transaction under Treas. Reg. §1.482-1(i)(7)	Amounts paid or received in connection with forming, dissolving, acquiring or disposing of the LLC, including contributions to and distributions from it	Part V, described on an attached statement

The Part V category is the one most owners miss. The regulation names it directly: “amounts paid or received in connection with the formation, dissolution, acquisition and disposition of the entity, including contributions to and distributions from the entity” (Treas. Reg. §1.6038A-2(b)(3)(xi)).

In everyday terms, all of these are reportable:

• You paid the formation service, state filing fee or registered agent with your personal card.
• You wired money from a personal account to open or top up the LLC’s bank account.
• You paid an LLC subscription, domain or contractor from a personal account.
• The LLC sent money to your personal account, whatever the transfer note says.
• You lent money to the LLC or the LLC lent money to you.

The Form 5472 branch guide goes through each type, how to report it, and the mistakes that show up most often.

What you file: pro forma Form 1120 plus Form 5472

Item	What it involves
Pro forma Form 1120	Fill in only the LLC’s name and address and items B (EIN) and E (initial, final, name or address change) on page 1. Write “Foreign-owned U.S. DE” across the top.
Form 5472	One form per related party with reportable transactions. For an LLC whose only related party is you, that is one form. Part II reports you as the foreign owner; Part III must be completed too, even though it repeats you.
Part V statement	A short attached statement describing contributions, distributions and other formation-type amounts.
Exchange-rate schedule	All amounts in US dollars; if you converted anything, attach a schedule of the rates used.

The LLC needs its own EIN. You, the owner, need either a US taxpayer identification number (SSN or ITIN) or a “reference ID number” that you assign and use consistently every year: alphanumeric, no spaces or special characters, up to 50 characters. You also enter your foreign tax identification number if you have one, or “None”.

Deadlines and how to send it

The pro forma 1120 and Form 5472 are due on the date a Form 1120 would be due: the 15th day of the 4th month after the tax year ends.

Tax year	Due date	Extended due date (Form 7004)
2025	April 15, 2026	October 15, 2026
2026	April 15, 2027	October 15, 2027

Form 7004 gives an automatic six-month extension. For a foreign-owned disregarded LLC it has to be sent the same way as the return itself, not to the usual Form 7004 address, and filed by the original due date.

You cannot e-file. Under the current instructions (revised December 2024; the IRS “About Form 5472” page listed no recent developments when checked in November 2026), you either:

• fax the package at 300 DPI or higher to 855-887-7737, or
• mail it to Internal Revenue Service, 1973 Rulon White Blvd, M/S 6112, Attn: PIN Unit, Ogden, UT 84201.

Check the instructions again before you send anything; the fax number and address have been stable for several years but are the kind of detail the IRS can change between revisions.

The $25,000 penalty

The penalty is the reason this form has a reputation. Under the current instructions:

• $25,000 for each failure to file Form 5472 when due and in the prescribed manner. That covers not filing, filing late and filing a substantially incomplete form.
• $25,000 for failing to maintain the required records.
• If the failure continues more than 90 days after the IRS notifies you, another $25,000 for each 30-day period, or part of one.

The penalty does not depend on the LLC owing any tax. Many foreign-owned LLCs owe no US income tax at all, which is why owners assume there is nothing to file.

The small-company exceptions that relax record-keeping for ordinary corporations (under $10 million of US gross receipts, or related-party payments under $5 million) explicitly do not apply to a foreign-owned disregarded entity (§1.6038A-1(h) and (i)).

If you missed an earlier year, talk to an accountant before filing it. How a late filing is handled, and whether penalty relief is realistic, depends on the facts.

What records you must keep

The LLC must keep permanent books and records under IRC §6001 sufficient to establish that its return, including the related-party transactions, is correct. The record maintenance rules add a few practical points (§1.6038A-3):

• Keep records as long as they may be relevant, and at least until the statute of limitations for that year has run.
• Records are generally expected to be in the US. Records kept abroad must be produced within 60 days of an IRS request, and translations within 30 days of a request for translation.

For a small software LLC, that means:

• every bank, card, payment processor and merchant-of-record statement for the year, in the original file format;
• a list of every movement of money between you and the LLC, with date, amount, currency, direction and what it was;
• evidence for expenses you paid personally on the LLC’s behalf (receipts, invoices);
• a signed note for any loan, with amount, interest rate and repayment terms;
• formation documents and the EIN letter.

Keep personal and company money apart

Nothing in the rules forbids you from paying an LLC expense personally. It just turns into a reportable transaction that you have to find later. The more your personal and company money mix, the longer the list and the higher the chance of missing one.

Practical rules that keep the list short:

• One direction per purpose. Fund the LLC by transfer from one personal account to the LLC account; pay yourself by transfer from the LLC account to one personal account. Avoid paying LLC costs from personal cards.
• No personal spending on the LLC card. If it happens, record it as a distribution the same month.
• Decide what a transfer is when you make it. A contribution, a loan and a distribution are reported differently. Write it in the transfer reference and in your list.
• Keep MoR and processor payouts going to the LLC account. Payouts from Lemon Squeezy, Paddle or Stripe that land in a personal account first create two transactions instead of none.

Multi-currency records

Form 5472 is in US dollars and English, with a schedule of the exchange rates used (§1.6038A-2(c)). If you fund the LLC from a euro, yuan or pound account, record:

• the amount that left your account, in its currency;
• the amount that arrived in the LLC account, in dollars;
• the rate, and where it came from.

When the dollar amount actually received is known, use it. When it is not (for example, you paid an LLC expense in your own currency), use a consistent, documented rate. The instructions require the schedule of rates but do not prescribe a rate source; agree on one with your accountant and use it every year.

A month-by-month habit

Fifteen minutes a month is usually enough for a one-person software LLC.

1. Download every statement for the month: LLC bank account, any LLC card, payment processor or MoR payouts, and the personal accounts you use to fund or pay the LLC.
2. Check the balances chain. Each statement’s opening balance should equal the previous closing balance. A gap means a missing statement.
3. Pair transfers between your own accounts. A transfer from your personal account to the LLC appears twice, once on each statement. Pair them so it is one event, not two.
4. Mark every owner↔LLC movement as a contribution, distribution, loan, repayment or expense paid on behalf, and note the US dollar amount.
5. File the evidence: receipts for owner-paid expenses, loan notes, invoices to or from related companies.

By December you have a complete list, and the Part IV figures and Part V statement are a matter of adding it up.

Year-end checklist

• All twelve months of statements for every LLC account, with an unbroken balance chain.
• Owner↔LLC transactions listed and totalled by type: contributions, distributions, loans (with opening and closing balances), interest, fees, expenses paid on behalf.
• Transactions with any other related party (a company you control, a family member) listed the same way.
• Exchange rates documented for every converted amount.
• Your SSN, ITIN or reference ID number, and your foreign tax ID if you have one.
• The LLC’s EIN, address and principal business activity.
• Decide: file by April 15, or send Form 7004 by April 15.
• Send by fax or mail as above, and keep the fax confirmation or certified mail receipt.
• State obligations, which differ by state. Delaware, for example, charges LLCs an annual tax of $400 due June 1 according to the Division of Corporations as of November 2026.
• Your own tax returns: in the US if the LLC has effectively connected income, and in your country of residence.

One item you can drop: since FinCEN’s interim final rule of March 2025, made permanent by a final rule effective August 14, 2026, US-formed companies no longer file beneficial ownership information (BOI) reports.

How Selfirm helps

Selfirm reads bank and broker statements in PDF, XLSX or CSV, a whole folder at once, checks every statement’s balance chain, pairs transfers between your own accounts and classifies each movement as income, expense or transfer for you to confirm. Every figure links back to the row of the original file. That is the work behind a Form 5472: pulling the owner↔LLC transactions out of a year of statements, with the evidence attached. Selfirm does not prepare or file the form; your accountant still does that.