Example: How Switching Your US LLC to Corporation Will Lower Your Taxes (E-2 and L-1 Visa Holders)

New Video: U.S. LLC is a Double Taxation Tax Trap for Canadians in the United States on E-2 and L-1 Visas 🇨🇦➡️🇺🇸.

Now let’s talk about the solution—how do we fix this double taxation issue?

One common approach is to have the U.S. LLC taxed as a corporation in the U.S. 🇺🇸

This is done by filing Form 8832, which changes the tax classification of the LLC from a disregarded entity (pass-through) to a corporation.

📌 Once that election is made:

The LLC is no longer treated as pass-through in the U.S.
It is treated as a corporation for tax purposes

Now here’s the key improvement:

Instead of having a mismatch:

🇺🇸 U.S. → pass-through
🇨🇦 Canada → corporation

You now have:

🇺🇸 U.S. → corporation
🇨🇦 Canada → corporation

📌 Corporation on both sides = much better alignment in tax treatment

Let’s re-run the same example 📊

Now assume the LLC is taxed as a U.S. corporation:

🇺🇸 U.S. federal corporate tax rate = 21% (excluding state tax)
🇨🇦 Canadian tax on dividends = 40%

We’ll use the same scenario to see how the numbers change under this structure.

Full Video on the Akif CPA YouTube Channel: https://www.youtube.com/watch?v=pK7GsEbHmvA

Link to the blogpost I am showing: https://akifcpa.com/heres-why-your-u-s-llc-is-a-double-taxation-tax-trap-as-a-canadian-on-an-e-2-or-l-1-visa-with-examples/

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Видео Example: How Switching Your US LLC to Corporation Will Lower Your Taxes (E-2 and L-1 Visa Holders) канала AKIF CPA