If you are a Latin American entrepreneur who is invoicing —or planning to invoice— in the United States, taxes can feel like a maze: forms with strange names, unfamiliar acronyms (IRS, EIN, LLC, 1099, W-8BEN…), and the fear of making a costly mistake.
The good news is that you don’t need to become a tax expert to do things right, but you do need to understand the basics in order to make sound decisions and protect your business.
In this guide, I explain in clear, simple language what you need to know about U.S. taxes as a Latin American entrepreneur, the types of taxes that exist, your main obligations, and how to avoid the most common mistakes.
1. Who Has to Pay Taxes in the U.S.?
In simple terms, the U.S. tax authority (the IRS) looks at two main things:
Where the income is generated
If your sales, services, or clients are in the U.S., the income is likely considered U.S.-source income, even if you live in another country.
Who receives that income
- Individual (freelancer, consultant, content creator, etc.)
- Company: LLC, Corporation, partnership, or another structure
Depending on this, you may have personal and/or corporate tax obligations.
2. Personal Taxes: What You Need to Know if You Get Paid as an Individual
If you invoice U.S. clients under your personal name or as a sole proprietor (self-employed), you enter the realm of personal taxes.
a) Income Tax
This is the tax applied to your profits. You must report:
- Service income (consulting, freelancing, coaching, marketing, development, etc.)
- Income from rentals, interest, royalties, commissions, affiliates, digital platforms, etc.
The tax rate depends on your income level and filing status (single, married, etc.) and may change each year.
b) Self-Employment Tax (if you are independent)
In addition to Income Tax, self-employed individuals in the U.S. pay Self-Employment Tax, which covers:
- Social Security
- Medicare
This tax applies to your net profit (income minus deductible expenses).
c) What if I live in Latin America but have U.S. clients?
This is where the following come into play:
- Double taxation treaties (if one exists between your country and the U.S.)
- Your status as a resident or nonresident for tax purposes
You may need to file in the U.S., in your home country, or in both—using foreign tax credits to avoid paying twice on the same income.
This analysis is precisely part of the Personal and Corporate Tax services we offer at Ubox.
3. Corporate Taxes: When You Operate Through a Company (LLC, Corp, etc.)
Many Latin American entrepreneurs create an LLC or Corporation in the U.S. to sell in the American market, get paid through Stripe, PayPal, or U.S. banks, and separate personal assets from business assets.
Each structure has a different tax treatment:
a) LLC (Limited Liability Company)
By default, the IRS usually treats an LLC as a pass-through entity:
- The LLC calculates its results,
- But the owner pays the tax on their personal return (flow-through).
However, there are options to elect a different treatment (for example, being taxed as a Corporation), depending on what is most tax-efficient.
b) Corporation (C-Corp)
- The C-Corp pays corporate income tax on its profits.
- Then, if it distributes dividends to you as the owner, you pay personal taxes on those dividends.
If not planned correctly, this can result in a form of double taxation.
c) Other Corporate Taxes to Consider
Depending on where you operate, your company may be subject to:
- State income taxes
- Sales Tax (similar to VAT, but with very specific rules)
- Payroll taxes, if you have employees
That’s why forming a company is not enough—you must design the tax structure correctly from the start.
4. Deductions and Expenses That Can Save You Money
One of the biggest advantages of understanding the tax system is knowing what you can legally deduct to pay less tax.
Common examples include:
- Equipment: computers, mobile devices, software, licenses, work tools
- Office expenses: coworking spaces, rent, utilities (depending on your structure)
- Business travel: flights, lodging, local transportation
- Marketing and advertising: ads, design, content, hosting
- Professional services: fees for accountants, lawyers, consultants
The key points:
- The expense must be necessary and reasonable for your business
- It must be properly documented (invoices, receipts, bank statements)
Good personal and corporate tax advice can uncover deductions you may not be taking advantage of today.
5. Common Mistakes Latin Entrepreneurs Make When Paying U.S. Taxes
These are some of the most frequent issues we see:
- Confusing revenue with profit
Paying taxes on everything invoiced without properly accounting for deductible expenses. - Not filing because “I’m not physically in the U.S.”
U.S.-source income often creates obligations, even if you live abroad. - Mixing personal and business accounts
This complicates deductions, increases tax risk, and weakens asset protection. - Ignoring state taxes
Focusing only on the IRS and forgetting that states may also impose taxes. - Filing late… or not filing at all
Penalties for late filing and non-payment can grow quickly.
6. What Documents Do You Need for Proper Tax Planning?
For an advisor to truly help you, you should have at least the following ready:
- Bank statements (personal and business)
- Income records by platform: Stripe, PayPal, e-commerce, marketplaces, etc.
- Contracts with key clients and suppliers
- Business-related expenses: invoices, receipts, digital records
- Prior-year tax returns (if you have filed before)
With this information, a clear picture of your situation can be built and the right strategy can be designed.
7. How Ubox Can Help You with Your Personal and Corporate Taxes
At Ubox, we support Latin American entrepreneurs and companies operating in the U.S. and across the region by helping them:
- Comply with the IRS and local authorities without stress or surprises
- Optimize their tax burden through deductions and credits allowed by law
- Choose and manage the best structure (individual, LLC, Corp, etc.) based on their goals
- Avoid double taxation when income is generated in multiple countries
- Have a clear annual plan instead of scrambling at every tax deadline
All of this through a 100% online approach, cloud-based processes, and a bilingual team that speaks your language and understands the reality of doing business from Latin America into the U.S.
Review Your Tax Situation with One of Our Advisors Today
The sooner you review your taxes, the more options you have to save money and correct issues in time.
- If you are already invoicing U.S. clients, we can review your filings and identify savings opportunities or hidden risks.
- If you are about to launch your company, we help you choose the most convenient tax structure and tax plan.
Review your tax situation with one of our advisors today, and let’s build a personal and corporate tax strategy that allows you to grow with confidence.
