Do I owe taxes in the US for my LLC formed in the US but owned by an Indian citizen?
You're doing business in the US and derive income from the US, so I'd say that yes, you should file a non-resident tax return in the US. And in Connecticut, as well, since that's where you're conducting business (via your domestic LLC registered there). Since you paid more than $600 to your contractor, you're probably also supposed to send a 1099 to him on that account on behalf of your LLC (which is you, essentially, if you're the only member). This is a complicated question that relies on the US-India Tax Treaty to determine whether the income is taxable to the US or to India.  The relevant provision is likely Article 15 on Personal Services. http://www.irs.gov/pub/irs-trty/india.pdf It seems plausible that your business is personal services, but that's a fact-driven question based on your business model.  If the online training is 'personal services' provided by you from India, then it is likely foreign source income under the treaty.  The 'fixed base' and '90 days' provisions in Article 15 would not apply to an India resident working solely outside the US. The question is whether your US LLC was a US taxpayer.  If the LLC was a taxpayer, then it has an obligation to pay US tax on any worldwide income and it also arguably disqualifies you from Article 15 (which applies to individuals and firms of individuals, but not companies).  If you were the sole owner of the US LLC, and you did not make a Form 8832 election to be treated as subject to entity taxation, then the LLC was a disregarded entity.  If you had other owners, and did not make an election, then you are a partnership and I suspect but cannot conclude that the treaty analysis is still valid. So this is fact-dependent, but you may be exempt from US tax under the tax treaty.  However, you may have still had an obligation to file Forms 1099 for your worker.  You can also late-file Forms 1099 reporting the nonemployee compensation paid to your worker.  Note that this may have tax consequences on the worker if the worker failed to report the income in those years.
My wife and I are both Canadian citizens living in the US with green card status.  I still have a Canadian RRSP and bank account in Canada that are dormant for the most part.  We use the Canadian debit card only when traveling (which is quite helpful). Neither of us file any paperwork in Canada anymore.  But as others have mentioned, we do file the FBAR form... this takes about 10 minutes and gets mailed somewhere in Michigan if I recall correctly.  (Keep the balance less than $10k total among all foreign accounts and you relieve yourself of this too.) As far as taxes go, we make less interest in our Canadian account than in our US accounts, so the tax burden is less. "You are not the only one with this problem. When Intuit changed their pricing and services structure in 2015 a lot of people got angry, facing larger fees and having to go through an annoying upgrade just to get the same functionality (such as Schedule D, capital gains). You have several options: (1) Forget Turbo Tax and just use paper forms. That is what I do. Paper is reliable. (2) Use forms mode in Turbo Tax. Of course, that may be even more complicated than simply filing out paper forms. (3) Use a different service. If your income is below $64,000 the IRS has a free electronic filing service. Other online vendors have full taxes services for less than Turbo Tax. (4) Add the amount to ordinary income. Technically, as long as you report the income, you cannot be penalized, so if you add the capital gain to your ordinary income, then you have paid taxes on the income. Even if they send you a letter, you can send an answer that you added it to ordinary income and that will satisfy them. Of course you pay a higher rate on your $26 if you do that. (5) If you are in the 15% or below income bracket you are exempt from capital gains, and you can omit it. Don't believe the nervous Nellies who say the IRS will burn your house down if you don't report $26 in capital gains. Penalties are assessed on the percentage of TAXES you did not pay (0.5% penalty per month). Since 0.5% of $0 is $0 your penalty is $0. The IRS knows this. The IRS does not send out assessment letters for $0. (6) Even if you are above the 15% bracket, there is likelihood it is still a no-tax situation (see 5 above). (7) Worst case scenario: you are making a million dollars per year and you omit your $26 capital gains from your return. The IRS will send you an assessment letter for about $10. You can then send them a separate check or money order to pay it. In all honesty I have omitted documented tax items, like taxable interest, that the IRS knows about many times and never gotten an assessment letter. Once I made a serious math error on my return and they sent me an assessment letter, which I just paid, end of story. And that was for a lot more than $26. The technical verbiage for something like this in IRS lingo is CP-2000, underreported income. As you can see from this official IRS web page, basically what they do is guess how much they think you owe and send you a bill. Then you pay it. If you do so in time, you don't even get a 0.5% interest penalty on your $6.75 owed or whatever it is. (8) Go hog wild. As long as you are risking an assessment on your $26, why not go hog wild and just let the IRS compute all your taxes for you? Make a copy of your income statements, then mail them to the IRS with a letter that says, ""Hi, I am Mr. Odinson, my SSN is XXX-XX-XXXX. My address is XYZ. I am unable to compute my taxes due to a confused state of mind. I am hereby requesting a tax assessment for the 2016 tax year."" Make sure you sign and date the letter. In all probability they will compute the full assessment and send you a bill (or refund)." Assuming you are Resident Indian. As per Indian Income Tax  As per section 208 every person whose estimated tax liability for the year exceeds Rs.   10,000, shall pay his tax in advance in the form of “advance tax”. Thus, any taxpayer   whose estimated tax liability for the year exceeds Rs. 10,000 has to pay his tax in   advance by the due dates prescribed in this regard. However, as per section 207, a   resident senior citizen (i.e., an individual of the age of 60 years or above) not having any income from business or profession is not liable to pay advance tax.   In other words, if a person satisfies the following conditions, he will not be liable to pay advance tax:   Hence only self assessment tax need to be paid without any interest. Refer the full guideline on Income tax website This person must pay taxes in both the overseas country and in the U.S. This is unusual; generally, only the U.S. demands this. Depending on the specific country, he would likely not be taxed twice as the U.S. generally recognises tax paid in a different country. Note there are some gotchas, though. For example, although Canada has a generally higher tax scheme than the U.S., you may still end up owing tax if you use the Tax-Free Savings Account system in Canada, as that is not recognised in the U.S. As to whether or not this person should form a company, that is far too broad a question. It's going to depend in large part on the tax situations of the countries involved. This person needs to consult an accountant specialising in this situation. That is, on personal versus business tax and on tax involving U.S. citizens. Yes, this person can and indeed must file and pay taxes in the U.S., from outside the U.S. If you are tax-resident in the US, then you must report income from sources within and without the United States.  Your foreign income generally must be reported to the IRS.  You will generally be eligible for a credit for foreign income taxes paid, via Form 1116. The question of the stock transfer is more complicated, but revolves around the beneficial owner.  If the stocks are yours but held by your brother, it is possible that you are the beneficial owner and you will have to report any income. There is no tax for bringing the money into the US.  As a US tax resident, you are already subject to income tax on the gain from the sale in India.  However, if the investment is held by a separate entity in India, which is not a US domestic entity or tax resident, then there is a separate analysis.  Paying a dividend to you of the sale proceeds (or part of the proceeds) would be taxable.  Your sale of the entity containing the investments would be taxable.  There are look-through provisions if the entity is insufficiently foreign (de facto US, such as a Subpart-F CFC).  There are ways to structure that transaction that are not taxable, such as making it a bona fide loan (which is enforceable and you must pay back on reasonable terms).  But if you are holding property directly, not through a foreign separate entity, then the sale triggers US tax; the transfer into the US is not meaningful for your taxes, except for reporting foreign accounts. Please review Publication 519 for general information on taxation of resident aliens. "As you said, in the US LLC is (usually, unless you elect otherwise) not a separate tax entity. As such, the question ""Does a US LLC owned by a non-resident alien have to pay US taxes"" has no meaning. A US LLC, regardless of who owns it, doesn't pay US income taxes. States are different. Some States do tax LLCs (for example, California), so if you intend to operate in such a State - you need to verify that the extra tax the LLC would pay on top of your personal tax is worth it for you. As I mentioned in the comment, you need to check your decision making very carefully. LLC you create in the US may or may not be recognized as a separate legal/tax entity in your home country. So while you neither gain nor lose anything in the US (since the LLC is transparent tax wise), you may get hit by extra taxes at home if they see the LLC as a non-transparent corporate entity. Also, keep in mind that the liability protection by the LLC usually doesn't cover your own misdeeds. So if you sell products of your own work, the LLC may end up being completely worthless and will only add complexity to your business. I suggest you check all these with a reputable attorney. Not one whose business is to set up LLCs, these are going to tell you anything you want to hear as long as you hire them to do their thing. Talk to one who will not benefit from your decision either way and can provide an unbiased advice." Yes, but make sure you issue a 1099 to these freelancers by 1/31/2016 or you may forfeit your ability to claim the expenses. You will probably need to collect a W-9 from each freelancer but also check with oDesk as they may have the necessary paperwork already in place for this exact reason.  Most importantly, consult with a trusted CPA to ensure you are completing all necessary forms correctly and following current IRS rules and regulations.  PS - I do this myself for my own business and it's quite simple and straight forward. In this case not only that you must register in California (either as domestic, or as foreign if you decided to form elsewhere), you'll also be on the hook for back-taxes if you didn't do it from the start. FTB is notorious for going after out-of-state LLCs that Californians open in other States trying to avoid the $800 fee.