If you own a business under an E-2 Treaty Investor Visa, choosing the correct U.S. tax return is critical. Filing the wrong form can lead to IRS penalties, delayed visa renewals, or complications with USCIS when proving your business is operating properly.
The tax return for E-2 business must file depends entirely on how the company is structured for U.S. tax purposes — not the visa itself.
The E-2 Visa Does NOT Determine Your Tax Return
An E-2 visa allows you to own and direct a U.S. business, but it does not dictate how that business is taxed. Instead, your required tax return depends on:
- Your entity type (LLC, Corporation, Partnership)
- Whether the business elected pass-through taxation
- The number of owners
- Whether an S-Corporation election was made
Overview: E-2 Business Tax Return Forms
| Business Structure | IRS Tax Form |
|---|---|
| Partnership or Multi-Member LLC | Form 1065 |
| C-Corporation | Form 1120 |
S-Corporation | Form 1120-S |
Form 1065 – Partnership or Multi-Member LLC
Who Files Form 1065?
- E-2 businesses with two or more owners
- Multi-member LLCs taxed as partnerships
- Joint ventures between E-2 investors
Key Features:
- The business itself does not pay income tax
- Profits and losses pass through to owners
- Each owner receives a Schedule K-1
- Owners report income on their personal tax returns (Form 1040-NR or 1040)
Why This Matters for E-2 Visas: Demonstrates active commercial operations and shows ongoing investment and risk, which is crucial to prove the business is not marginal.
Form 1120 – C-Corporation
Who Files Form 1120?
- E-2 businesses structured as C-Corporations
- LLCs that elected to be taxed as corporations
Key Features:
- The corporation pays its own U.S. corporate tax
- Profits taxed at the corporate level
- Dividends paid to owners may be taxed again
- Required even if the owner is a foreign national
Form 1120-S – S-Corporation
Who Files Form 1120-S?
- Corporations or LLCs that elected S-Corp status
- Businesses with eligible shareholders
- Many single-owner E-2 businesses
Key Features:
- Pass-through taxation (no corporate income tax)
- Owner receives a reasonable salary
- Remaining profit flows through as distributions
- Reported via Schedule K-1
Single-Member LLCs
If you are a single E-2 owner with an LLC:
- Default: Disregarded Entity
- Income reported on Schedule C
- Often not ideal for E-2 visa compliance
- Frequently converted to S-Corp or C-Corp
Why Choosing the Right Tax Return Is Critical for E-2 Visa Holders
Filing the correct tax return affects:
- E-2 visa approval and renewal
- Proof of substantial investment
- Demonstration of non-marginal business
- Payroll and employee evidence
- USCIS and consular credibility
- Avoiding IRS penalties and audits
Work With an E-2 Visa CPA
E-2 businesses are not standard U.S. businesses. They require:
- Cross-border tax expertise
- Immigration-aware accounting
- Proper entity structuring
- Accurate, defensible tax filings
At E2 Visa CPA, we specialize exclusively in:
- E-2 visa business tax returns
- Forms 1065, 1120, and 1120-S
- IRS compliance for foreign-owned U.S. companies
- Tax strategies aligned with visa renewals