Q: I am on my H4 EAD visa, Can I establish an LLC and opt is a "S Corporation" for Taxation or are only citizens allowed?
I am currently working on H4 EAD for a company in Wyoming. Can I establish an LLC in Texas and opt it as an "S Corporation" for Taxation. I did see a lot of articles online mentioning that S Corp can only be opted by Citizens or Permanent Residents. Is this true?
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A:
If you're on an H4 EAD visa, you are allowed to start and run a business, including forming an LLC. However, when it comes to electing an "S Corporation" for tax purposes, there are specific restrictions. The IRS requires that S Corporation shareholders must be U.S. citizens or permanent residents (Green Card holders).
Since you are on an H4 visa, you wouldn't qualify to be a shareholder of an S Corporation. This means you wouldn't be able to elect S Corporation tax status for your LLC.
You can still form an LLC and run the business under the default tax structure or as a C Corporation, which does not have the same citizenship or residency requirements. It’s advisable to explore these options with a tax professional to find the best structure for your situation.
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