I have a US LLC, am I managing it right? A real checklist

12 verifiable items in 30 minutes. No-nonsense checklist for active LLC owners: IRS classification, Form 5472, BOI Report, Registered Agent, asset separation, taxation in your country and CRS/DAC reporting. Spot the issues before the IRS does.

Running a well-kept LLC boils down to a checklist of 12 verifiable items in 30 minutes, aligned with the IRS's 4 critical checkpoints and the formation state's 4 critical checkpoints.

You have a US LLC and everything seems to work: you invoice clients, move money, pay your expenses. So far so good. But there's an uncomfortable question very few people ask in time: is it actually being managed correctly?

At Exentax we deal every week with people whose LLC is fully active and who only realise, once a problem is already on the table, that they have spent years operating with a half-closed structure. Not out of bad faith, but out of misinformation. The formation was sold as "ready to operate" and nobody bothered to explain the real ongoing obligations.

This article is a no-nonsense checklist. If you answer "no" or "I don't know" to several of these questions, you should review your structure before the IRS or your tax authority does it for you.

Why so many LLC owners are operating wrong without realising

The problem isn't the LLC itself. It's the ongoing management. Most services that form an LLC leave the client with three documents (Articles of Organization, EIN letter, Operating Agreement) and a "you're good to go". But properly managing an LLC involves:

Annual compliance with the IRS and the state of formation
Compliance with FinCEN (BOI Report)
Coherence between US taxation and your country of residence
Real operational banking, fully separated from your personal assets
Automatic reporting (CRS, DAC7, DAC8) that is already in motion

If in your head an LLC is still "an offshore company where nothing is reported", your information is years out of date. The reality today is very different.

The checklist in 7 blocks

1. Is your LLC correctly classified before the IRS?

By default, an LLC is a disregarded entity if it has a single member or a partnership if it has multiple. It does not pay federal income tax by itself: income flows through to the owner.

Ask yourself:

Do you know for sure whether your LLC is Single-Member (disregarded) or Multi-Member (partnership)?
Do you have the EIN letter from the IRS confirming that classification?
Has any S-Corp or C-Corp election (Form 8832 / 2553) been filed without you realising?

A wrong classification completely changes your filing obligations and your real tax outcome. If you're unsure, don't assume, verify it.

2. Are you filing Form 5472 + Form 1120 every year?

If you are a non-resident with a Single-Member LLC and there has been any transaction between you and the LLC (draws, contributions, payments), you are required to file Form 5472 along with a pro-forma Form 1120. Every year. Without meaningful exceptions for the typical profile.

The base penalty for not filing or filing incomplete is USD 25,000 per form per year, and it stacks. It's not an abstract threat, the IRS does apply it. And if a notice does land, at Exentax we keep the dossier ready so you reply in hours, not weeks.

See our complete Form 5472 guide for the details. If you can't recall whether you filed it in recent years, you are not "off the radar", you are silently building up a liability.

3. Is your BOI Report up to date with FinCEN?

The Beneficial Ownership Information Report is the filing to FinCEN identifying who really owns your LLC. It has been mandatory since the CTA took effect for the vast majority of LLCs, and the penalty regime is aggressive: up to USD 591 per day of delay plus criminal sanctions in serious cases. We close it with you from Exentax: one call, the filing goes out, the archive is set, and the risk stays on paper.

Ask yourself:

Did you file the initial BOI when the LLC was formed?
Have you updated the BOI after any change (address, ID document, beneficiary)?
Do you know who is monitoring those changes for you?

If you can't remember doing it, check it today. It's not optional paperwork.

4. Are your Registered Agent and state filings current?

Every LLC needs an active Registered Agent in its state of formation and, depending on the state, must file an Annual Report or pay a franchise tax. If you let the agent expire or skip the annual report, your LLC moves into "delinquent" status or is even "dissolved" and stops legally existing.

Warning signs:

You don't know the name of your Registered Agent or how to reach them
You have no automatic reminders of your state deadlines
It's been over 12 months without any official communication from the state

If your LLC was dissolved and you keep invoicing with its EIN, every invoice can be challenged and your asset separation breaks down.

5. Do you keep personal money and LLC money separate?

This is the most common and most expensive mistake. If you use the LLC account for personal expenses, or you collect LLC invoices into your personal account, you are breaking the corporate veil. The consequence: your LLC stops protecting your personal assets and, in an audit, the LLC and you are treated as the same thing. Relax: at Exentax this is what we do every week, we close it before the letter ever lands in your inbox.

We cover this in depth in our piece on separating personal and LLC finances.

Minimum checklist:

LLC bank account (Mercury, Relay, Wise Business…) separate from your personal one
Owner's draws documented with date and reference
Capital contributions identified as such
Zero personal expenses on the LLC card

6. Are you reporting correctly in your country of residence?

This is where most structures collapse. The fact that the LLC pays no federal income tax in the US does not mean you owe nothing back home. If you're a tax resident of Spain, the LLC's income is attributed to your IRPF as business income (see administrative doctrine, including the line reinforced in February 2020). The same kind of attribution rules exist in most EU countries.

Ask yourself:

Do you actually declare LLC income on your local tax return?
Have you filed any required foreign-asset / foreign-account reports (Modelo 720/721 in Spain, equivalents elsewhere)?
Does your local accountant actually understand how a US LLC works?

If your accountant told you "don't declare anything because it's taxed in the US", get a second opinion. Today. This is where most penalties stack up, and they are perfectly avoidable with proper planning. We close it with you from Exentax: one call, the filing goes out, the archive is set, and the risk stays on paper.

7. Are your banking, brokers and exchanges aligned with CRS and DAC?

Wise, Mercury, Relay, Interactive Brokers and crypto exchanges report automatically to tax authorities under CRS, DAC7 and, from today, DAC8. It's not "what people say online", it's in their public policy. More detail in our Wise Business and CRS analysis.

That means your banks and brokers are sending balance, income and transaction data to your country's tax authority. If your tax return doesn't match what they report, the inconsistency triggers automatic flags.

Check:

That you know which jurisdiction reports each account (e.g. Wise reports from Belgium, not the US)
That the tax residence declared on each platform is correct and consistent
That your annual filings are coherent with those automatic reports

Warning signs that something is off

Beyond the checklist, these are the patterns we see when someone reaches Exentax with a poorly managed structure:

They don't remember which state their LLC is formed in, or who their Registered Agent is
They have never filed Form 5472 and don't know what it is
They never filed the BOI Report or didn't update it after relevant changes
They mix personal and LLC accounts
Their local accountant told them the LLC "doesn't need to be declared" in their home country
They have crypto, brokers or foreign accounts with no local reporting
There is no signed Operating Agreement, or they don't know where it is
They receive letters from the IRS or the state and don't know what they mean

If three or more of those apply, you are not "flying under the radar", you are building up a liability that eventually surfaces.

Mistakes we see every week

What to do if you find issues

First: stay calm and don't let more time pass. Most situations are fixable if you act with a clear head.

Typical steps in a clean-up:

Real diagnosis of the structure and the unfiled years
Ordered strategy: what to file first, what to update, what to communicate to your country of residence
Late filings to the IRS and FinCEN
State updates and reinstatement if the LLC was dissolved
Banking and operational reorder to stop generating new mistakes
Coordination with your local tax advisor to align local filings

At Exentax we work with people coming from generic accountants or "low cost" formation services that didn't include real ongoing management. We don't judge, we organise. More on the real annual maintenance of an LLC and on the difference between US residents and non-residents for LLC purposes.

What you should take away from this article

Having an LLC is not the same as having it well managed. The gap between the two is measured in avoidable penalties, tax-authority headaches and lost optimisation opportunities.

If after reading this checklist you still have doubts, the sensible move is to review now, before the problem appears. At Exentax we don't sell LLCs: we structure real operations, manage compliance and coordinate banking, investing and international taxation. If you already have an LLC and you're not sure whether it's well structured, we'll review it with you and tell you what needs adjusting and what's already fine.

Book a free 30-minute consultation and let's go through it together. Better to spot today what needs to be fixed than to wait for the IRS or your tax authority to do it for you.

Next steps

Now that you have the full context, the natural next step is to map it against your own situation: what fits, what doesn't, and where the nuances depend on your residency, your activity and your volume. A quick review of your specific case usually saves a lot of noise before taking any structural decision.

Tax compliance in your country: CFC, controlled-foreign rules and income attribution

A US LLC is a fully legal, internationally recognized vehicle. But compliance does not end at incorporation: as an owner who is tax-resident elsewhere, your local tax authority still has the right to tax what the LLC earns. The key is under which regime.

By jurisdiction

Spain (LIRPF/LIS). An operative single-member disregarded LLC (real services, no significant passive income) is generally treated under income attribution (art. 87 LIRPF): the LLC's net profits are attributed to the member in the year they arise and integrated into the general IRPF base. If instead the LLC elects corporation treatment (Form 8832) and is controlled by a Spanish resident with mostly passive income, the CFC regime (art. 91 LIRPF for individuals, art. 100 LIS for companies) can apply. The choice is not optional: it depends on economic substance, not on the label.
Information returns. US bank accounts with average or year-end balance >€50,000: Form 720 (Law 5/2022 after CJEU C-788/19, 27/01/2022, penalties now under the general LGT regime). Related-party transactions and dividend repatriation: Form 232. US-custodied crypto: Form 721.
Spain–US tax treaty. The treaty (BOE 22/12/1990, Protocol in force 27/11/2019) governs double taxation on dividends, interest and royalties. An LLC without a permanent establishment in Spain does not by itself create a PE for the member, but effective management can if all activity is run from Spanish territory.
Mexico, Colombia, Argentina and other LATAM jurisdictions. Each has its own CFC regime (Mexico: Refipres; Argentina: foreign passive income; Chile: art. 41 G LIR). Common principle: profits retained inside the LLC are deemed received by the member if the entity is treated as transparent or controlled.

Practical rule: an operative LLC with substance, properly declared in your country of residence, is legitimate tax planning. An LLC used to hide income, fake non-residence or shift passive income with no economic justification falls within art. 15 LGT (anti-abuse) or, worse, art. 16 LGT (simulation). The facts decide, not the paperwork.

At Exentax we structure the entity to fit the first scenario and document every step so your local return can be defended in case of review.

Legal and regulatory references

This article relies on rules currently in force. Main sources for verification:

United States. Treas. Reg. §301.7701-3 (entity classification / check-the-box); IRC §882 (tax on foreign income effectively connected with a US trade or business); IRC §871 (FDAP and withholding on non-residents); IRC §6038A and Treas. Reg. §1.6038A-2 (Form 5472 for 25% foreign-owned and foreign-owned disregarded entities); IRC §7701(b) (tax residency, substantial presence test); 31 U.S.C. §5336 (Corporate Transparency Act, BOI Report to FinCEN).
Spain. Law 35/2006 (LIRPF), arts. 8, 9 (residency), 87 (income attribution), 91 (CFC for individuals); Law 27/2014 (LIS), art. 100 (CFC for companies); Law 58/2003 (LGT), arts. 15 (anti-abuse) and 16 (simulation); Law 5/2022 (Form 720 penalty regime after CJEU C-788/19 of 27/01/2022); RD 1065/2007 (Forms 232 and 720); Order HFP/887/2023 (Form 721 crypto). That is exactly why at Exentax we keep your calendar tight — you stop thinking about deadlines and we close them before they ever bite.
Spain–US treaty. BOE of 22/12/1990 (original DTT); Protocol in force since 27/11/2019 (passive income, limitation on benefits).
EU / OECD. Directive (EU) 2011/16, amended by DAC6 (cross-border arrangements), DAC7 (Directive (EU) 2021/514, digital platforms) and DAC8 (crypto-assets); Directive (EU) 2016/1164 (ATAD: CFC, exit tax, hybrid mismatches); OECD Common Reporting Standard (CRS).
International framework. OECD Model Convention, art. 5 (permanent establishment) and Commentaries; BEPS Action 5 (economic substance); FATF Recommendation 24 (beneficial ownership).

How to read the LLC management checklist as a stable annual map rather than as a sporadic to-do list

The LLC management checklist reads more usefully when it's treated as a stable annual map between the recurring obligations (Form 5472, BOI, Registered Agent renewal), the recurring documents (Operating Agreement, separation of funds, basic accounting) and the dates when each is due, than as a sporadic to-do list. The map doesn't change year to year — only the dates shift.

Why the note is organized by recurring obligation rather than by month of the year

The note is organized by recurring obligation rather than by month of the year, because the obligations remain the same each year while their dates shift, and this view keeps the map reusable from one cycle to the next.

Before going further, put numbers on your case: the Exentax calculator compares, in under 2 minutes, your current tax bill with what you would carry running a US LLC properly declared in your country of residence.

> Free consultation, no strings attached

Applying any of these rules to your specific case depends on your tax residency, the LLC's activity and the documentation you keep. This content is informational and does not replace personalized professional advice.

Banking and tax facts worth clarifying

Fintech and CRS information evolves; here is the current state:

Notes by provider

Mercury operates with several federally chartered partner banks and FDIC coverage via sweep network: mainly Choice Financial Group and Evolve Bank & Trust, with Column N.A. still in some legacy accounts. Mercury is not itself a bank; it is a fintech platform backed by those partner banks. If Mercury closes an account, the balance is typically returned by paper check mailed to the account holder's registered address, which can be a serious operational problem for non-residents; keep a secondary account (Relay, Wise Business, etc.) as contingency.
Wise ships two clearly different products: Wise Personal and Wise Business. For an LLC you must open Wise Business, not the personal account. Important CRS nuance: a Wise Business held by a US LLC sits outside CRS because the account holder is a US entity and the US is not a CRS participant; the USD side operates via Wise US Inc. (FATCA perimeter, not CRS). In contrast, a Wise Personal opened by an individual tax-resident in Spain or another CRS jurisdiction does trigger CRS reporting via Wise Europe SA (Belgium) on that individual. Opening Wise for your LLC does not bring you into CRS through the LLC; a separate Wise Personal in your own name as a CRS-resident individual does report.
Wallester (Estonia) is a European financial entity with an EMI/issuing-bank licence. Its European IBAN accounts are within the Common Reporting Standard (CRS) and therefore trigger automatic reporting to the tax administration of the holder's country of residence.
Payoneer operates through European entities (Payoneer Europe Ltd, Ireland) that are also in scope for CRS for clients resident in participating jurisdictions.
Revolut Business: when paired with a US LLC, it operates under Revolut Technologies Inc. with Lead Bank as its US banking partner. The account delivered is a US account (routing + account number); no European IBAN is issued to a US LLC. The European IBANs (Lithuanian, Belgian) belong to Revolut Bank UAB and are issued to European clients of the group. If you are offered a European IBAN tied to your LLC, confirm exactly which legal entity holds that account and which regime it reports under.
Zero tax: no LLC structure delivers "zero tax" if you live in a country with CFC/tax transparency or income attribution rules. What you achieve is no double taxation and correct reporting at residence, not elimination.

How to turn the initial setup into a sustainable annual rhythm

A checklist works best when it stops being read as a list and starts being read as a calendar. The setup of an LLC is the first cycle, but the cycles that follow are the ones that determine whether the structure remains light to operate or starts accumulating quiet friction. The simplest way to make that transition is to copy the headings of the initial checklist into a recurring annual reminder and to attach to each heading the file or folder where the supporting evidence will live for that year.

Legal & procedural facts

FinCEN and IRS reporting requirements moved recently; the current state is:

BOI / Corporate Transparency Act: your LLC is NOT required to file (a competitive advantage). After FinCEN's March 2025 interim final rule, the BOI Report obligation was narrowed to "foreign reporting companies" (entities formed OUTSIDE the US and registered to do business in a state). A US-formed LLC owned by a non-resident does NOT file the BOI Report: one fewer filing on your calendar, less paperwork, and a cleaner structure than ever. If your LLC was formed before March 2025 and you already filed BOI, keep the acknowledgement. The regulatory status can change again: we monitor FinCEN.gov on every filing and, if the obligation comes back, we handle it at no extra cost. Current status verifiable at fincen.gov/boi.
Form 5472 + pro-forma 1120. For a Single-Member LLC owned by a non-resident, the final regulations of Treas. Reg. §1.6038A-1 (in force since 2017) treat the LLC as a corporation for 5472 purposes. Procedure: pro-forma Form 1120 (header only: name, address, EIN, tax year) with Form 5472 attached. It is filed by certified mail or fax to the IRS Service Center in Ogden, Utah, not e-filed via standard MeF. Due date: April 15; extension via Form 7004 to October 15. Penalty: $25,000 per form per year, plus $25,000 per additional 30 days of non-filing after IRS notice.
Substantive Form 1120. Only applies if the LLC has filed a check-the-box election to C-Corp (Form 8832): it then pays 21 % federal corporate tax and files a substantive 1120. A standard disregarded LLC does not file a substantive 1120 and does not pay federal corporate tax.
EIN and notice. Without an EIN you cannot file 5472 or BOI. The IRS does not warn before imposing penalties; you find out when an EIN is flagged or a later filing is rejected. And if a notice does land, at Exentax we keep the dossier ready so you reply in hours, not weeks.

Practical reminder

Each tax situation depends on your specific residency, the activity carried out and the contracts in force. The information here is general and does not replace personalised advice; check your particular case before taking structural decisions.

Exentax today update: living checklist

Keeping an LLC well-managed today requires an operational calendar worth pinning to your agenda:

Monthly. Bank reconciliation at Mercury/Slash (month close), expense categorization, encrypted backup of statements, review of Stripe/PayPal/DoDo (disputes, holds).
Quarterly. Subscription review (cancelling inactive ones reduces noise in the 5472), owner draw documented with memo and reference, check of funds available for taxes.
Annual (today tax calendar). 15 Jan: book your advisor for 5472 prep. 15 Feb: close the books. 15 Mar: 1042-S if you issue payments to related parties (rare for SMLLC). 15 Apr: 5472 + pro-forma 1120 or Form 7004 to extend to 15 Oct. Anniversary month: state Annual Report + Registered Agent renewal. Within 30 days of any change: BOI Update if your LLC remains in scope (foreign reporting company).

Documents to retain 7 years

Articles of Organization, EIN Letter (CP 575 or 147C), signed Operating Agreement.
Filing confirmations: 5472, BOI, Annual Report, Franchise Tax.
Bank and gateway statements month by month.
Invoices issued and received (PDF + ledger).
Owner draw evidence (transfers with explicit memo).

Frequently asked questions

Do I need formal local-GAAP accounting? No. An LLC does not require Spanish PGC. You do need a clean single ledger that supports the 5472 and potential bank KYC.

What if the year closed without operations? The 5472 is only required if there were reportable transactions between you and the LLC. Still, it's prudent to declare if there was initial capital or Registered Agent paid from owner funds.

Can I run it solo or do I need an advisor? Solo, if you understand 5472, BOI and Annual Report. Advisor, if your volume exceeds ~50 invoices/year or you sell to the US (PE/ECI risk).

Annual LLC operating checklist, the Exentax way

Having an LLC means having a calendar; without one, sooner or later 5472 or BOI slip. The Exentax checklist fits on one page and covers the twelve moments of the year when something shifts.

Q1: BOI current, state annual report, banking reconciliation before 5472, and federal payment/extension before April 15.
Q2-Q3: review of corporate or address changes that trigger a BOI update, audit of gateways and MCC, quarterly reconciliation.
Q4: accounting close, distribution planning, next-year budget and verification of EIN/CP-575/OA consistency before the new fiscal year.

If you want to run your LLC with this checklist or have us operate it for you, run the Exentax calculator or book thirty minutes.

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