Some entrepreneurs looking to sell in the US market through Etsy, Amazon, Shopify, or Walmart may consider forming an LLC company to manage their business more efficiently and professionally. However, it's not mandatory for everyone selling with the print-on-demand model to establish a company; this decision can vary based on sales goals, country of residence, tax situation, and the platforms used.
The most accurate approach for sellers looking to establish a print-on-demand company is to first clarify their sales model and tax situation, and then proceed with professional support.
Podbul supports production, printing, and shipping operations in the print-on-demand process, while it is also important for sellers to accurately understand fundamental issues such as LLC, EIN, state selection, tax filing, and sales tax. In this article, we will simply discuss the basic tax process that print-on-demand sellers considering forming an LLC in the United States should know.
Why is it important to set up a US company for Print on Demand?
In the print-on-demand model, the seller does not stock products in advance. Instead, they print their designs T-shirt, hoodie, sweatshirt, poster, canvas It applies to such products and offers them for sale in its store. When a customer places an order, the product is put into production, the printing process is completed, and the product is sent directly to the customer.
In this model, establishing a company in the U.S. can be beneficial for some sellers in terms of creating a more professional and organized business structure.
Forming an LLC in the US can offer advantages in the following areas:
- It can help create a more professional business structure.
- It can enable businesses to appear as businesses instead of individual sellers in marketplaces and payment infrastructures.
- Opening a business bank account can help separate personal and business income.
- An EIN can facilitate the process of obtaining a federal tax ID.
- It can help to more systematically track income, expenses, production costs, shipping fees, and platform commissions.
- It can strengthen the store's reliability and brand perception.
- It can provide access to more regular and professional transaction processes in some payment infrastructures.
- As sales volume increases, it can help to more clearly manage commission, deduction, and profit margin calculations.
- In the long term, it can contribute to a more solid foundation for the branding and scaling process.
Cost tracking is particularly important in the print-on-demand model. This is because the seller's profit is not solely dependent on the product's selling price. Product cost, printing fee, shipping cost, platform commission, advertising expenses, and payment processing fees must be evaluated together.
Sellers working with Podbul can better track product and order processes, enabling more accurate pricing for their stores and healthier profit calculations.
Most Preferred Company Type in the US: LLC
One of the most preferred structures among small businesses and online sellers in the US is the LLC. LLC is an abbreviation for “Limited Liability Company.” It can be translated to Turkish as a structure similar to a limited liability company, but the LLC structure in US law is not exactly the same as the company system in every country.
One of the main reasons for choosing an LLC is its flexible structure. It can be established by a single individual or managed by multiple partners. Additionally, it can more clearly delineate the separation of liability between the company owner and the business.
However, forming an LLC does not automatically mean you will pay less in taxes. How an LLC is taxed depends on how many members the company has and what tax classification is elected with the IRS.
A single-member LLC is considered a structure that the IRS generally does not treat as separate from its owner in most cases. In this situation, the company's income is typically reported on the owner's personal tax return. An LLC with multiple members, by default, can be treated as a partnership. LLCs can also elect to be taxed as a corporation in certain circumstances. Therefore, it is important for sellers looking to set up a print-on-demand company in the U.S. to know that the LLC structure and the tax process are not the same thing.
Therefore, it is incorrect to think, “I established an LLC, and my tax process is complete.” The LLC is merely the company structure; tax filings and liabilities must be considered separately. It is important for sellers who want to establish a U.S. company through print on demand to know that the LLC structure is not the same as the tax process.
What is an EIN and why is it important?
EIN, “Employer Identification Number” is the abbreviation for. It is a federal tax identification number used for businesses in the U.S. Many people may think of an EIN as a company's tax ID number.
Print on demand sellers may encounter EIN in the following areas:
- When opening a business bank account,
- When applying to payment infrastructures,
- When configuring marketplace accounts,
- On some tax forms,
- If hired in the USA,
- In the company's federal tax matters.
Applying for an EIN through the IRS is free. Therefore, you should be cautious of third-party sites that charge a fee to obtain an EIN. Some service providers may offer consultation during the application process, but the EIN itself is a number provided free of charge by the IRS.
Obtaining an EIN is an important step. However, it does not mean that the company has completed all of its tax obligations on its own. After obtaining an EIN, federal, state, and in some cases, sales tax obligations must be followed according to the company's operational status.
How Does the Federal Tax Process Work?
The federal tax process in the U.S. Internal Revenue Service is performed. Depending on the type of company and its tax classification, different forms and declaration processes may arise.
For example:
- A single-member LLC owner can report their income on their personal tax return.
- When a multi-member LLC is treated as a partnership Form 1065 statements of partnership such as these may come up.
- For a company taxed as a corporation Form 1120 such institutions may require corporate tax return filing.
- Nonresident alien, that is, for individuals who are not residents for U.S. tax purposes Form 1040-NR various forms may arise.
The biggest mistake at this point is to think there is a single tax process for everyone. The tax liability of two different people establishing a company in the US can be completely different. For example, the tax situation of a person living in the US and a person living in Turkey who establishes an LLC in the US may not be the same.
Some factors that affect the tax process are:
Selected tax classification.
Whether the company owner lives in the U.S.,
U.S. citizen, green card holder, resident alien, or nonresident alien,
Whether the company has a single member or multiple members,
The state in which the company was founded,
Whether the income is U.S. sourced,
Whether there is a physical office, warehouse, employee, or operation in the US,
Whether economic ties have been established in the states where sales are made,
Therefore, consulting with an accountant or tax professional before establishing a company in the US is crucial, especially for international sellers.
Can Non-Residents Start a Company in the US?
Individuals not residing in the U.S. can also establish a company in the U.S. under certain conditions. Therefore, many entrepreneurs residing in Turkey explore the option of establishing an LLC to sell to the U.S. market or to create a more professional structure in global markets.
However, not living in the U.S. does not mean there will be no tax liability. Likewise, establishing a company in the U.S. does not automatically create the same tax outcome for everyone.
The following topics are particularly important for people who do not live in the U.S.:
- Nonresident alien tax status,
- US-sourced income subject,
- Effectively connected income concept,
- Tax treaties,
- Form 1040-NR necessity,
- Bank account and payment infrastructure requirements,
- Tax obligations in one's own country.
For example, a person living in Turkey who establishes an LLC in the US and sells through Etsy or Shopify must consider not only their US-based obligations but also their tax obligations in Turkey.
Even if the company was incorporated in the U.S., the tax laws of the country where the company owner resides may also apply.
Therefore, the most appropriate approach for international sellers who wish to establish a company in the US is to simultaneously evaluate the tax implications in both the US and their home country.
Why is the provincial election important?
Company formation in the US is done at the state level, not the federal level. Therefore, a state must be chosen when forming an LLC. States like Delaware, Wyoming, New Mexico, Florida, New Jersey, and New York are frequently researched during this process.
However, each state's formation fees, annual reporting obligations, franchise tax systems, registered agent requirements, and business regulations can vary. Therefore, it is not advisable to make a decision solely based on which state is “the most popular.”.
Entrepreneurs selling print-on-demand products with POD (potentially referring to a specific platform or business model) generally prefer an online sales-focused structure. Therefore, when selecting a state, the company's objective, whether there will be physical operations in the US, annual costs, the need for a registered agent, and the suitability of bank accounts/payment infrastructure should be considered together.
In short, for sellers on Podbul looking to scale their sales processes, the choice of state should be evaluated not only based on setup costs but also on annual maintenance costs and long-term ease of use.
Sellers looking to grow their sales processes at Podbul, support they may need in the initial stages Podbul POD Starter Pack can review it.
Why Should Sales Tax Be Considered Separately?
In the US, sales tax is a separate matter from federal income tax. Sales tax is state-based, and each state has its own rules. In some states, economic nexus can be established when a certain sales volume or transaction count is reached. This may require the seller to register for sales tax in that state.
Marketplace platforms such as Etsy, Amazon, and Walmart may collect sales tax from buyers and remit it to the relevant state under marketplace facilitator rules in some states. However, this may not mean that all of the seller's obligations are automatically terminated.
If you're selling through your own store, like Shopify, sales tax tracking can become more critical. This is because you may need to separately consider registration, collection, and filing processes based on the states where you make sales.
In the print-on-demand model, since products can be shipped to customers in different states, sales tax is an area that requires particular attention, especially during the growth phase.
Print on demand and sellers who want to establish a company should particularly track sales tax when selling to different states.
Current status of BOI Notification
BOI stands for “Beneficial Ownership Information” and is a regulation concerning the reporting of a company's true beneficial owners. This topic has become a major point of discussion in recent years among individuals establishing companies in the US.
However, it's important to be aware of outdated information, as BOI rules have changed over time. According to current FinCEN guidance, domestic companies established in the U.S. and their owners are exempt from BOI reporting. The BOI obligation may primarily apply to certain foreign companies established outside the U.S. that register to do business in the U.S.
Therefore, it is important for anyone considering forming an LLC in the US to check for current official statements regarding BOI. Content prepared according to old rules may still be found on the internet.
Is it necessary for all Print on Demand sellers to establish a company in the USA?
No. Establishing a company in the USA is not mandatory for every print on demand seller. Some sellers may start with individual accounts or a business structure in their home country before selling. Others may choose to set up a company to establish a more professional structure, access payment infrastructures, or operate more smoothly in the US market.
The important thing here is to understand that company formation is not a goal in itself, but a tool to support the business model. If you haven't yet clarified your product idea, target market, sales channel, and cost projections, simply forming an LLC won't be enough to build a successful business.
First, the following questions must be clarified:
Which market will I sell in?
Which product groups will I focus on?
Should I use Etsy, Amazon, Shopify, or a different channel?
Who will be my print on demand production partner?
What are my product costs and profit margin?
What is my monthly sales target?
Will starting a company really contribute to this structure?
Once these questions are clearly answered, the incorporation process can be planned more consciously.
Operational Advantages with Print on Demand in a Pod Order Process
In the print-on-demand model, one of the areas where sellers lose the most time is production and shipping operations. When processes such as product printing, quality control, packaging, shipping, and tracking are managed individually, the operational burden increases as the business grows.
Podbul helps print-on-demand sellers manage their production, printing, and shipping processes more efficiently with its US-based production center. The fact that production takes place in America is important for sellers selling to the US market, as it allows for more controlled order processing, clearer tracking of shipping operations, and more professional management of the customer experience.
This allows sellers to focus more on design, marketing, and store management while selling with a production-on-demand model without holding inventory. Company formation, tax processes, and business structure constitute the financial and legal side of this operation. Therefore, simply creating good designs is not enough for a successful print-on-demand business; the right platform selection, cost tracking, tax awareness, and a reliable production partner must be considered together.
Understanding the Tax Process Before Setting Up a Company in the USA is Essential
Establishing a company in the US can be a powerful step for print-on-demand sellers. Especially for entrepreneurs aiming for long-term sales on platforms like Etsy, Amazon, Shopify, or Walmart, incorporating can provide a more professional structure.
However, establishing a company alone is not a guarantee of success. The LLC structure, EIN, federal tax return, state obligations, sales tax, Boy The situation and the international tax implications should be assessed together.
The healthiest approach is to clarify your business model before starting a company, determine your sales channel, choose your print-on-demand production partner, and then proceed with support from a tax specialist.
With Podbul, you can manage production, printing, and shipping operations more controllably within the print on demand process, allowing you to focus on your design, marketing, and sales strategies. The process of establishing a company in the US is an important step to consider for a more organized financial and legal aspect of this growth journey. In summary, sellers who want to establish a print on demand company in the US should first clarify their sales channel, production partner, costs, and tax situation.
This content is for general informational purposes only. Taxes, company formation, and legal processes may vary depending on personal circumstances, country, state, and business model. Therefore, it is recommended to seek professional advice from a qualified accountant, tax advisor, or legal expert in the U.S. before making any decisions.
Is it mandatory to establish a company in the US to do print on demand?
No, it is not mandatory for everyone to establish a company in the US to do print on demand. This decision can vary depending on the platform where sales are made, the country of residence, the payment infrastructure, tax situation, and business goals.
What does forming an LLC in the U.S. provide for print-on-demand sellers?
Establishing an LLC in the US can help sellers create a more professional business structure, open a business bank account, obtain an EIN, and track income and expenses more systematically.
How does Podbul help sellers in the print on demand process?
Podbul helps print-on-demand sellers manage their production, printing, and shipping processes more efficiently. This allows sellers to sell without holding inventory and focus more on areas like design, marketing, and store management.
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