Your LLC has earned money, and now you want some of it in your personal account. For a single-member LLC owned by someone outside the US, that step is simpler than most founders expect. There is no payroll to run and no US salary to set. But how you record the transfer matters, because it appears on your yearly Form 5472. This guide explains the method, the records and the common mistakes.
The short answer
- A single-member LLC owner takes money out as an owner draw (also called a distribution). It is a transfer from the business account to you.
- The draw itself is not a tax event for a disregarded LLC. What matters for US tax is whether the LLC’s profit is effectively connected with a US trade or business, not when you move it.
- Every draw is a transaction between the LLC and its foreign owner, so it belongs in your records and on Form 5472.
Why there is no salary
A single-member LLC is a disregarded entity by default. For US tax, the LLC and its owner are one taxpayer. You cannot employ yourself, so there is no W-2 salary and no US payroll for you as the member. You pay yourself by moving profit from the company to your own account.
This changes if the LLC elects to be taxed as a corporation with Form 8832. A corporation can pay salaries and dividends, each with its own US tax and reporting. Our LLC vs C-Corp guide compares the two.
How an owner draw works
- Check the balance. Keep enough in the LLC for upcoming bills, state fees and filing costs.
- Transfer from the LLC’s account to your personal account. A bank transfer, a Wise transfer or a payout to your own card. Use the company account, never a client payment sent straight to you.
- Record it as an owner draw in your books, not as an expense.
- Keep the proof: the bank statement line and the date and amount in USD.
There is no legal minimum or maximum, and you do not need to draw on a schedule. But leaving a sensible cushion in the company keeps it able to pay its own costs, which also helps keep personal and business money clearly separate.
Why the record matters: Form 5472
Every foreign-owned single-member LLC files Form 5472 with a pro-forma Form 1120 each year. Form 5472 reports reportable transactions between the LLC and related parties, and you, the foreign owner, are a related party. That includes:
- Money you take out (owner draws or distributions).
- Money you put in (capital contributions), for example to pay the formation fees.
- Loans between you and the LLC, in either direction.
- Expenses you paid personally for the LLC, such as software on your own card.
So the total of your draws for the year is a number on the form. If your books mix draws with expenses, the form will be wrong. Our guide to related party transactions on Form 5472 lists each type in detail.
Recording draws correctly
| What happened | Record it as | Why |
|---|---|---|
| Transfer from the LLC account to you | Owner draw (withdrawal) | Reported on Form 5472 |
| You paid a personal bill from the LLC account | Owner draw | It is money to you, not a business cost |
| You sent your own money to the LLC | Owner contribution | Reported on Form 5472 |
| You paid an LLC expense with your personal card | Expense plus owner contribution | The cost is business; the money came from you |
| A client paid you personally for LLC work | Avoid; if it happened, record it and correct it | Mixing payments blurs the company’s income |
Multi-currency draws
If you move USD from the LLC to an account in euros, lira or pesos, record the draw at the USD amount that left the LLC. The exchange difference happens on your side, not the company’s. If the LLC holds a non-USD balance, record each transaction in USD at the rate on the day and keep the original amount too.
Draws and your tax
For a disregarded LLC, the draw does not create US tax by itself. Your US tax depends on the LLC’s profit for the year and whether it is effectively connected income, whatever you draw. If it is, you file Form 1040-NR on that profit, whether you drew all of it or none of it. If it is not, drawing it does not change that. See foreign-owned LLC taxes for the test.
Your home country is a separate question. Many countries tax their residents on the LLC’s profit or on what they receive from it, and some treat the LLC as a company whose payments are dividends. Check how your country taxes the money before you plan large draws.
Mistakes we see most
- Paying personal costs from the LLC card and calling them expenses. It overstates costs and understates draws on Form 5472.
- No record of money put in at the start. The formation fees you paid personally are a contribution. Record them.
- Client money sent to a personal account. It weakens the separation between you and the company and complicates the records.
- Waiting until year end to sort it out. Twelve months of transfers are much harder to classify than one month at a time.
FAQ
Can I pay myself a salary from my single-member LLC?
Not as an employee of a disregarded LLC. You take owner draws. A salary is only possible if the LLC elects to be taxed as a corporation.
Is there tax withheld when I take a draw?
No US withholding applies to an owner draw from a disregarded LLC. Your US tax, if any, is based on the LLC’s effectively connected profit and filed on Form 1040-NR.
Do I report draws if the LLC made no profit?
Yes. Form 5472 reports transactions with the owner whatever the profit. Even with $0 income, contributions and draws go on the form.
Can I take money out right after a client pays?
Yes, if the money is in the LLC’s account and you record the draw. Keep enough in the account for the LLC’s own bills.
Our Accounting plan records every owner contribution and withdrawal separately each month for Form 5472, and keeps multi-currency activity in USD with the original amount on record. Federal filing is a separate service, or included in Full Compliance. Accounts without a live bank feed work from a monthly statement upload. Full Compliance includes the bookkeeping together with the yearly federal and state filings.
