QUESTION: How to Find a CPA for a Foreign-Owned Disregarded Entity in New Mexico?
I am a non-resident in the US and the sole proprietor of an LLC company in New Mexico. My LLC is a foreign-owned disregarded entity (FDE) for tax purposes and I have to file Forms 1120 and 5472 with the IRS, as well as the FBAR with the FinCEN, every year. I also need to maintain a minimum accounting (monthly bookkeeping) and a balance sheet and profit and loss statement (BL and P/L) validated by a registered CPA to present to my tax manager in Spain. I am looking for a CPA who can help me with these tasks and advise me on the best accounting software and practices for my situation. How can I find a reliable and affordable CPA for my FDE in New Mexico? What are the average fees and services that I can expect from a CPA for my FDE?
EXPERT’S RESPONSE: If you’re a non-resident business owner operating an LLC in the US, you are classified as a Foreign-Owned Disregarded Entity (FDE) for tax purposes. This means that while your business is legally separate from you as the owner, it’s not considered a separate entity for tax return purposes. The income and expenses of the FDE are “passed through” to your personal tax return. Below are the specific filing requirements you need to meet, such as Proforma Forms 1120, 5472, and FBAR.
Choosing the Right CPA for Your FDE
Working with a qualified CPA who understands the complexities of FDEs is essential to ensure you meet all compliance requirements and make informed financial decisions. Here’s how to find the right CPA for your FDE in New Mexico:
1. Look for Specialized Expertise:
- Focus on Foreign-Owned Businesses: Seek CPA firms that have a strong track record of working with foreign-owned businesses, particularly single-member LLCs in the US. They’ll have a deeper understanding of the unique tax implications and compliance requirements.
- Experience with IRS Filings and International Taxation: Ensure the CPA has expertise in handling Proforma Forms 1120, 5472, and FBAR, as well as a solid grasp of international tax laws and regulations.
2. Consider Services Offered:
- Tax Filing: Verify that the CPA can handle the necessary tax filings for your FDE, including Forms 1120, 5472, and FBAR.
- Bookkeeping and Accounting: If you need assistance with monthly bookkeeping, balance sheets, profit and loss statements, or accounting software recommendations, inquire about these services.
- General Accounting: For broader accounting needs, ensure the CPA can provide general accounting services to support your business operations.
- FBAR (FinCEN Form 114): If your FDE has foreign financial accounts with combined balances exceeding $10,000 at any point during the year, you’ll need to file an FBAR (Foreign Bank Account Report).
3. Importance of Working with a CPA for FDEs
Navigating US tax laws as a foreign business owner can be complex. Partnering with a qualified CPA who specializes in FDEs is crucial to ensure compliance and protect your financial interests. A CPA can:
- Guide you through the specific tax and filing requirements for your FDE.
- Prepare and file the necessary forms accurately and on time.
- Advise you on tax-efficient strategies to minimize your tax liability.
- Help you maintain proper accounting records and financial reporting.
- Assist with any tax audits or inquiries from the IRS.
4. Reputation and Reviews:
- Research and Recommendations: Gather information about the CPA firm’s reputation through online reviews, professional networks, or referrals from other business owners in similar situations.
- Credentials and Licensing: Verify that the CPA is licensed and in good standing with their respective state board.
5. Fees and Pricing Transparency:
- Understand Pricing Structures: Inquire about the CPA’s fee structure and pricing for the specific services you require. This will help you budget and compare costs among different firms.
- Get Written Quotes: Obtain written quotes for services to ensure clarity and avoid surprises.
Recommended CPA Firm: O&G Tax and Accounting
O&G Tax and Accounting stands out as a firm with a strong focus on serving foreign-owned single-member LLCs in the US. We offer a comprehensive range of services, including:
- Preparation of Forms 1120, 5472, and FBAR
- Monthly bookkeeping and accounting
- Accounting software recommendations
- General accounting services
- Consultations and personalized advice
We have extensive experience working with FDEs in New Mexico and can help you navigate the complexities of US tax laws. Contact us today to schedule a consultation and discuss your specific needs.