How do I declare income earned abroad?
I am a sole owner of LLC in the USA, the registered adress of the LLC is in France. The LLC is a pass-through entity so I am supposed to be filing taxes for LLC on my personal income. I am filing my taxes in France (resident). I had imagined that this was a simple situation and I simply have to file my profits somewhere on 2047 form. I have not filed anything for 2010: my expenses exceeded the revenue so I thought I had nothing to file. Now comes the time to file 2011 (a week left) and someone told me that I cannot file taxes this way and that I am supposed to register business in France.
Registering business in France is a question for another topic, for now however I really need to decide what to do with my 2011 tax. Do I enter my profit under Bénéfices des Professions Industrielles, Commerciales ou Artisanales in the “Revenus des Professions non Salariees”? I am selling digital goods and services, both online from home office in France to customers abroad and in France. In your opinion, what is the best way of dealing with this and what are possible consequences?