I have a single person LLC setup in the US and have someone who works for me in Colombia and will be paid a percentage. Since all the money from the company would flow into the US account and be taxed on me, how do I pay him without him being double taxed? Create an entity there?
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Why wouldn't the money the LLC pays to the Colombian be an expense? It's like any other payroll expense (Except there may be odd witholdings you have to make because it's to someone outside the country). |
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Limit Liability Companies are pass-through entities to it's owners, thus they are not double taxed. Put the Colombia as an expense (subcontractor). Also if he is running the site you may be able to put yourself in the Owners chair and not the CEO position thus only paying 21% tax as passive income, compared to whatever your tax bracket is plus 15% for self employment. If the site is doing well and it's worth spend a couple thousand on a really good CPA each year, I would recommend getting one. |
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The costs to sub-contractors come out pre-tax, you won't be taxed on the amount you pay, simple. |
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