Bookkeeping for a Foreign-Owned US LLC or Corporation (2026): What Records the IRS Expects, Tracking Form 5472 Transactions, Stripe and Amazon Payouts, Owner Money In and Out, Software, and the Year-End Pack for Your Tax Return

Most foreign owners think of their US LLC's tax obligations as a form: Form 5472 with a pro forma 1120, once a year. But the form is only as good as the records behind it, and the law that requires the form also requires the records. A foreign-owned US company must keep books that let the IRS check every transaction with its owner and related parties, and the penalty for not keeping them is the same $25,000 as for not filing.

Good books also do far more than satisfy the IRS. Your home country's tax return usually depends on the LLC's profit. Your bank and Stripe will ask for financial statements if they review the account. An investor or buyer will ask for them. And a clean year-end pack is the difference between a tax return prepared in a week and one that takes three rounds of questions.

This guide explains what to record, how to treat the transactions that confuse foreign owners most, and what to send your tax preparer at year end.

In short: A US LLC or corporation that is 25% or more foreign-owned must keep records sufficient to establish the accuracy of Form 5472, including every transaction with its foreign owner and related parties; failing to keep them can cost $25,000. Use a separate US business account, record owner contributions, distributions and loans separately from income and expenses, record Stripe, PayPal and Amazon sales gross with fees as an expense, keep the books in US dollars, and reconcile every month. A C-Corporation needs a full balance sheet for Form 1120. Keep records for at least as long as the IRS can assess tax, and longer for anything that affects later years.

Why a foreign-owned company has a stricter duty

Every US business must keep records that support its tax return. A reporting corporation under Section 6038A, which includes a US corporation that is at least 25% foreign-owned and, since 2017, a foreign-owned single-member LLC, has an extra duty: it must keep records of its reportable transactions with foreign related parties, in a way that allows the IRS to verify them.

For a disregarded LLC owned by a non-resident, that means you need to be able to show, for the year:

• every contribution you made to the LLC, in cash or kind;
• every distribution or withdrawal you took;
• loans between you and the LLC, and repayments;
• payments the LLC made on your behalf, and expenses you paid for the LLC personally;
• any services, rents, royalties or sales between the LLC and you or companies you control.

The $25,000 penalty applies to a failure to file Form 5472 and to a failure to maintain these records, with further penalties if the failure continues after IRS notice. See Form 5472 explained.

Rule one: one account, used only for the company

Most bookkeeping problems for foreign owners start with mixing money. Your US LLC should have its own business bank account, and every company transaction should run through it, or through a payment processor that pays into it. See US business bank accounts for non-residents.

When mixing does happen, which it often does in the first months, record it properly:

• you paid a company expense personally (for example, the formation fee or a software subscription on your personal card): record it as an owner contribution, with the receipt;
• the company paid a personal expense (your family's flight): record it as an owner distribution, not a business expense.

Regular commingling is also one of the things a court looks at when deciding whether to disregard an LLC's limited liability. See what limited liability really protects.

Owner money in and out

These are the entries foreign owners get wrong most often, and they are exactly the ones Form 5472 asks about.

A common mistake is to treat money you send in as income, which overstates profit, or profit you take out as an expense ("owner salary"), which understates it. For a single-member LLC, the owner is not paid a salary; drawings are distributions.

Payment processors and marketplaces: record sales gross

Stripe, PayPal, Shopify Payments and Amazon all pay you net: the sales minus fees, refunds, chargebacks and, for Amazon, many other charges. If you record only the deposits as income, your books understate both sales and expenses, and your figures will not match the Form 1099-K the processor may file, or its own reports.

The correct approach:

1. record gross sales as income;
2. record processing fees, Amazon referral and FBA fees, advertising and other charges as expenses;
3. record refunds and chargebacks as reductions of sales;
4. record any sales tax collected by you as a liability, not income (marketplaces usually collect and remit it themselves in most states; see state taxes for a foreign-owned LLC);
5. reconcile the net payout to the bank deposit.

Most accounting software can import Stripe and Shopify transactions directly. For Amazon, use the monthly settlement reports or a connector. See LLC for e-commerce sellers and Stripe for non-residents.

A simple chart of accounts

A small service LLC or online store does not need more than this:

• Income: sales or service revenue; refunds and discounts (as a negative).
• Cost of sales (for products): inventory purchases, freight, customs duty, fulfilment fees.
• Expenses: contractors; software and subscriptions; advertising; processing and marketplace fees; bank fees; registered agent, state fees and annual report fees; professional fees; travel (only genuinely for business); interest.
• Assets: bank accounts; Stripe and PayPal balances; inventory; equipment.
• Liabilities: credit card; loans from owner; sales tax payable.
• Equity: owner contributions; owner distributions; retained earnings.

Separate contractor payments by contractor, with each one's W-8BEN or W-9 on file. See paying contractors abroad from a US company.

Cash or accrual, and US dollars

• Cash basis records income when it is received and expenses when they are paid. Most small LLCs and many small corporations may use it, and it is the simplest.
• Accrual basis records income when it is earned and expenses when they are incurred. Inventory-heavy businesses and larger corporations may need it, and investors expect it.

Choose one and use it consistently; your first return effectively sets the method.

Keep the books in US dollars. If the company has a foreign-currency account (for example, a euro balance in Wise), record transactions at the exchange rate on the day, or a consistent monthly average, and note the source of the rates. Your home-country return may need the figures converted again into your own currency under local rules, but the US books stay in dollars.

LLC or corporation: how much detail?

Single-member LLC owned from abroad

The IRS filing is a pro forma Form 1120 with Form 5472. It shows no profit and loss, but Form 5472 lists the totals of each type of related-party transaction. Your home-country return, on the other hand, usually needs a full profit and loss, and sometimes a balance sheet. Many countries tax the LLC's profit as your own business income, so keep books that would satisfy your local tax authority too. See your country guide.

Multi-member LLC

A partnership return, Form 1065, needs a full profit and loss, each partner's share, capital accounts and, above certain sizes, a balance sheet. Track each member's contributions and distributions separately. See single-member vs multi-member LLC.

C-Corporation

Form 1120 needs a full income statement, and a balance sheet (Schedule L) and reconciliation of book to tax income unless total receipts and total assets are both under $250,000. Track:

• share capital and any additional paid-in capital;
• loans to and from shareholders, with interest at a reasonable rate;
• dividends paid (and the withholding on them);
• fixed assets and depreciation;
• accrued expenses at year end.

The corporation's books also decide the Delaware franchise tax if you use the assumed par value method, because it depends on gross assets. See the C-Corp guide for non-residents.

Software

What matters is not the software but the habit: categorise every transaction, attach receipts, and reconcile to the bank and processor statements every month.

How long to keep records

• At least three years after you file the return, which is the normal IRS assessment period.
• Six years if income could be understated by more than 25%.
• Indefinitely if a return is not filed; the assessment period does not start until it is.
• For assets and capital (equipment, share capital, owner contributions), keep records until three years after the year you dispose of the asset or close the company.

Your home country may require longer: often six to ten years. Use the longer period. Keep the records electronically, in English where possible, and make sure you can produce them within a reasonable time if asked.

The year-end pack

Send your tax preparer the following for each year:

1. Bank statements for every US and foreign account the company holds, January to December.
2. Processor and marketplace reports: Stripe, PayPal, Shopify, Amazon annual summaries, and any Form 1099-K received.
3. Profit and loss and, for corporations and partnerships, a balance sheet.
4. A summary of owner and related-party transactions: contributions, distributions, loans, payments to and from your other companies, with dates and amounts.
5. Contractor list with W-8BEN/W-9 forms and amounts paid; any 1099-NEC already issued.
6. Fixed asset purchases with invoices.
7. Any IRS or state letters received.
8. Changes in ownership, address or responsible party during the year.

With that pack, the US filing is quick. See the US tax filing checklist. If earlier years were never filed, see missed US tax filing: what to do.

Worked examples

These are illustrative cases, not client cases.

A design agency LLC. A Wyoming LLC owned by a designer in Istanbul invoices US clients about US$90,000 a year and pays two freelancers abroad. The owner keeps a spreadsheet: each month, the Mercury statement is categorised into sales, contractors, software and bank fees, with transfers to the owner marked as distributions. At year end, the totals of contributions (US$1,200 for start-up costs paid personally) and distributions (US$64,000) go onto Form 5472. The same profit and loss supports the owner's Turkish return.

An Amazon FBA store. A Delaware LLC owned by two brothers in Mumbai sells kitchen products on Amazon US. They use QuickBooks with a settlement-report connector, so sales are recorded gross and Amazon's referral, FBA, storage and advertising fees appear as expenses. Inventory bought from a supplier in China is recorded as inventory and expensed as it sells. As a two-member LLC, the company files Form 1065, and each brother's capital account is tracked.

A start-up corporation. A Delaware C-Corporation founded by a team in Warsaw receives a US$150,000 pre-seed investment on a SAFE. The accountant records the SAFE as a separate equity-like item, books monthly payments to the Polish subsidiary for development at cost plus 8%, and prepares a balance sheet for Form 1120 and the investors.

Common mistakes

• Recording owner money as income and owner draws as expenses.
• Recording only net payouts from Stripe or Amazon.
• Mixing personal and company spending with no record of which was which.
• No records of related-party transactions, leaving Form 5472 guessed.
• Books in several currencies without a clear conversion.
• Doing the books once a year, from memory.
• Destroying records when the company closes, before the assessment period ends.

Frequently asked questions

Does a single-member LLC owned from abroad need bookkeeping if it only files a pro forma 1120? Yes. Form 5472 requires the totals of your transactions with the LLC, the law requires records that support them, and your home-country return usually needs the LLC's profit and loss.

Is money I send to my LLC taxable income? No. It is a capital contribution. Record it as equity, and report it on Form 5472.

Should I record Stripe payouts or gross sales? Gross sales, with fees, refunds and chargebacks recorded separately.

Do I need an American accountant to keep the books? No. You or a bookkeeper anywhere can keep them, in English and US dollars. The tax return needs someone who knows the US forms.

How long should I keep records? At least three years after filing, longer in some cases, and for as long as your home country requires.

How UCB can help

Each year we prepare and file Form 5472 with the pro forma 1120, Form 1120 for corporations, Form 1065 for multi-member LLCs, and the information returns foreign-owned companies need, through our US tax filing service. Send us your year-end pack and we will tell you if anything is missing before we file. See also our formation, EIN and bank account package.

Need your US company's year-end filings done? WhatsApp us at +1 315 961 2956 or email enquiries@ucbsolutions.com.