Quarter 1 is when tax season kicks into high gear, especially for those of us living abroad. Taxes aren’t a matter that is to be taken lightly as any mistakes can become very costly. For me this years tax season marked the first time I need to file for a business as well which increased the complexity substantially.
Let me give you a little bit of background about my current situation, and then I’ll describe how I resolved it this year. I am a US citizen but I have been living abroad for the past 8 years working and traveling around Asia. The fact that I hold a US passport means I am liable to pay taxes, on any income I earn anywhere in the world, or I could run into potential problems further down the road. To further complicate matters I also started a limited liability company to provide me legal protection for my newly started business.
When I previously lived in the US I stayed in Connecticut and that is also where I still have a drivers license making me tax liable there. My corporation founded in Delaware also means I need to pay some form of taxes there. Currently, I also have another address in the State of New York. My sister moved there and I use her address as my main mailing address for all my banking and
Should I have registered my LLC as a foreign entity in CT?
This was the main question that worries me the most because it carries quite heavy fines with it. It amounts to $165 per month for every month I operated in the State without being registered but this does not include the fine for operating without the appropriate business license. I never looked up the fine numbers for this since it should never apply to me anyways and I don’t want to unnecessary scare myself and risk my quality sleep by finding out. I was also unsure in which States I would have to file what. The issue of having listed multiple addresses over the last year due to my sister moving only further complicated the issue.
I considered two main options to resolve my tax issues, do it myself and get a