Do I file Form 8858 for my one-person company abroad?
If the company is disregarded for US purposes and you own it, then yes, and the fact that it is invisible for income purposes is exactly why the form gets missed. Disregarded means its results go on your own return as if the company were not there. It does not mean there is nothing to report about it. The form asks for the entity's own income statement and balance sheet, its functional currency and the tax it paid locally. So you end up preparing accounts for an entity whose profits you have already reported, which feels redundant right up until the penalty for not doing it.
Is my overseas freelance business a foreign branch?
Possibly, and it is worth deciding rather than assuming. A branch for this purpose is a separately identifiable business carried on abroad with its own books, which is a description that fits a good deal of work conducted through a registered presence in another country and fits very little conducted with no local footprint at all. The test is factual: what is registered, what is booked separately, and where the activity actually happens. Settle it before the year is filed, because it decides whether there is a reporting obligation and what records you should be keeping to support it.
What is a foreign disregarded entity?
An entity formed under another country's law that US rules treat as not existing separately from its owner. It arrives there either because the default classification puts it there or because an election was made. Locally it is a real company with real filings and a real tax bill. For your US return, its income and expenses are yours directly. The mismatch between those two views is the source of most of the trouble on these files: the local accountant sees a company, the US return sees you, and nobody is looking at the information return that sits between them.
Do I need Form 8858 if the branch lost money?
Yes. The obligation follows ownership of the entity or branch, not its result, and a loss year has a balance sheet like any other. Loss years matter for a second reason as well: how the branch loss is treated on your own return, and the currency movement on the entity's own items, are both things you want fixed while the year is fresh rather than argued about later. Filing a loss year is cheap. Reconstructing one long afterwards, from accounts prepared under another country's standards by someone you no longer deal with, is not.
How do I convert my foreign branch accounts into US dollars?
Start by fixing the functional currency, because everything else follows from it, and it is a determination about how the business actually operates rather than a preference. From there the translation method is a documented choice applied consistently, with the currency movement on the branch's own items falling out of it. The part clients underestimate is consistency across years: the opening position for each year has to be the closing position of the last one, on the same basis. Keep the working that gets you from the local statutory accounts to the reported figures, and each later year becomes short rather than a fresh argument.
How is a loan I made to my own foreign company treated?
Two ways at once, which is the point worth understanding. Locally it is a real debt carrying real interest, deductible in the entity's own accounts and possibly subject to withholding on each interest remittance. For US purposes, if the entity is disregarded, the loan is between you and yourself and the interest is not income to you. The entity's accounts therefore show something your own return does not, and the information return has to present the entity's position as it stands locally while your return reflects the US view. Document the loan properly in any event, because the local side of the treatment depends on it.
What is GILTI?
A US rule that taxes shareholders of controlled foreign corporations currently on the corporation's income above a routine return on its tangible assets, rather than waiting for a dividend. The target was profit — especially from intangibles — parked in low-tax jurisdictions. The name, the deduction and the asset-based reduction are the parts Congress has revisited, so we compute it from the rules in force for the filing year instead of a remembered percentage. See the GILTI inclusion and Form 8992.
Is double taxation legal?
Yes. Nothing prevents two countries from taxing the same income under their own domestic law — each is exercising its own jurisdiction. What treaties and credit systems do is relieve the outcome rather than prohibit the charge, and relief is generally something you must claim on a return or a form, not something applied automatically. Miss the claim and the double charge stands. Double taxation explains the mechanism.
