Form 5472 vs Form 1040-NR: what foreign LLC owners actually need

These two forms get confused constantly by foreign founders who form a US LLC. Both have "non-US" energy, both deal with the IRS, both look intimidating. But they cover completely different things, and filing the wrong one doesn't satisfy the other obligation.

Here's the short version, then the details.

What Form 5472 covers

Form 5472 is an information return. It exists so the IRS can monitor money flowing between US entities and their foreign owners — historically a popular vehicle for tax avoidance, hence the disclosure.

It's filed by:

• A US corporation with at least 25% foreign ownership, or
• A foreign-owned US LLC that is treated as a disregarded entity for US tax (the typical setup for a non-US founder with a single-member Delaware/Wyoming LLC)

For our purposes — a foreign person with a single-member US LLC — Form 5472 is filed once per year, attached to a mostly-blank Form 1120, and faxed or mailed to the IRS Ogden PIN Unit. It reports:

• Capital you contributed to the LLC (money in)
• Distributions you took out (money out)
• Loans, expense reimbursements, intercompany transactions
• Year-end total assets of the LLC

It does not report your personal income. It's not a tax return. No tax is owed on the basis of filing it. It's purely informational.

Penalty for not filing

$25,000 per LLC, per missed year.

What Form 1040-NR covers

Form 1040-NR is a personal income tax return for non-US persons. You file it if you, individually, have US-source income that's subject to US tax. Examples:

• You worked in the US during the year (even briefly) and got paid by a US employer
• You earned rental income from a US property you own personally
• You received dividends from a US C-corporation
• You sold US real estate at a gain
• You earned income that's "effectively connected with a US trade or business" (ECI) — a technical category that can include certain LLC activities, but for most foreign-owned single-member LLCs doing online or services work outside the US, it doesn't apply

The key concept: 1040-NR is about your US tax. If you have no US-source income personally, you don't owe a 1040-NR — even if you own a US LLC.

Where the confusion comes from

People assume "I own a US LLC → I have US income → I file 1040-NR." That's wrong for the typical case, because:

• A single-member LLC owned by a foreign person is disregarded for US tax — meaning the LLC itself doesn't pay US tax
• The LLC's income is treated as your personal income for tax purposes
• But if that income isn't US-source (e.g., you're a UK developer selling SaaS to global customers, none of whom are in the US specifically, with no US employees, no US office, no US physical presence), it's not subject to US income tax
• And if there's no US tax owed, there's nothing to report on a 1040-NR

Form 5472 still applies because it's an information return, not a tax return. The IRS wants to know the money moved, even if no tax is owed on it.

Side-by-side

• Who files it? Form 5472 is filed by the LLC. Form 1040-NR is filed by you personally.
• What does it report? Form 5472 reports transactions between you and the LLC. Form 1040-NR reports your US-source personal income.
• Is tax owed when you file? No tax with Form 5472. Tax may be owed with Form 1040-NR depending on your income.
• When is it due? Form 5472 is due April 15 (Oct 15 with extension). Form 1040-NR has the same dates.
• How is it filed? Form 5472 by fax or paper mail (can't e-file). Form 1040-NR can be e-filed in many cases.
• Penalty for not filing? Form 5472: $25,000 per missed year. Form 1040-NR: percentage of unpaid tax, plus interest.

Most common scenarios

You're a foreign founder with a US LLC that has no US income

You owe: Form 5472 every year. Form 1040-NR usually not.

This is the most common situation for solo founders abroad. Your LLC exists, you put some capital in, you take distributions, all your customers are global, no US physical presence. Form 5472 is required because of the LLC structure. 1040-NR isn't required because you don't have US-source income personally.

You're a foreign founder with a US LLC that earns US-source income

You owe: Both. Form 5472 for the LLC, Form 1040-NR for yourself.

Less common but real: you have US employees, US customers paying US sales tax, US physical operations, or US real estate held by the LLC. Now there's actual US tax to pay on the LLC's income, which flows to you personally.

You don't own a US LLC but have other US income

You owe: Form 1040-NR. Not Form 5472.

Example: you worked remotely for a US company that classified you as an employee and withheld US tax. That triggers a 1040-NR to reconcile the withholding. No LLC involved, no Form 5472 obligation.

The takeaway

If you're a foreign founder with a US LLC, assume you owe Form 5472 every year regardless of revenue. Whether you also owe a Form 1040-NR depends on whether you have US-source personal income — for most non-US founders running online businesses, you don't.

Worried you've never filed Form 5472? Read what happens when you miss the deadline — it's less catastrophic than the headline penalty implies.