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What is the LLC tax treatment & Federal / State Tax Brackets?

LLC can be treated  by the IRS as either a corporation, partnership, or as part of the LLC’s owner’s tax return (a “disregarded entity", dependi

ng on elections made by the LLC and the number of members. 

Single Member LLC. LLC with only one member is treated as an entity disregarded as separate from its owner for income tax purposes (but as a separate entity for purposes of employment tax and certain excise taxes), unless it files Form 8832 and affirmatively elects to be treated as a corporation.

Multi Member LLC. LLC with at least two members is classified as a partnership for federal income tax purposes unless it files Form 8832 and affirmatively elects to be treated as a corporation.

Federal income tax        

The U.S. has two separate income tax systems: Federal and State. The Federal tax is administrated by the IRS (Internal Revenue Service) and imposed by the IRC (internal Revenue Code) on net taxable income (gross income minus tax deductions).

Tax Rate--Single Taxpayers--2019

      Taxable income:                   Tax:

Over       But not over         Tax            %        On amount over            

$      0       $  9,700                 $    0.00   10       $      0    9,700       39,475                   970.00   12          9,700   39,475       84,200               4,543.00   22         39,475   84,200      160,725            14,382.50   24         84,200  160,725      204,100           32,748.50   32        160,725  204,100      510,300           46,628.50   35        204,100  510,300      .......                153,798.50   37        510,300

State tax

State income tax comes in addition to any Federal income tax imposed by the IRS and it is administrated by each state Tax or Revenue Department. There are Seven states that have no income tax:




South Dakota




Two states have a limited income tax on individuals.  These states tax only dividend and interest income:


New Hampshire

Here's a listing of each state's highest income tax rate and how much income you'll have to make to pay that rate.

Alabama: 5% on income over  $3,000

Alaska: No income tax

Arizona: 4.54% on income over $150,000

Arkansas: 7% on income over  $32,600

California:10.55% on income over $1 million

Colorado: flat 4.63% of federal taxable income

Connecticut: 6.5% on income over $500,000

District of Columbia: 8.5% on income over $40,000         

Delaware: 6.95% on income over $60,000

Florida: No income tax

Georgia: 6% on income over $7,000

Hawaii: 11% on income over $200,000

Idaho: 7.8% on income over $26,418

Illinois: flat 3% of federal AGI with modifications

Indiana: flat 3.4% of federal AGI with modifications

Iowa: 8.98% on income over $63,315

Kansas: 6.45% on income over $30,000

Kentucky: 6% on income over $75,000

Louisiana: 6% on income over $50,000

Maine: 8.5% on income over $20,150

Maryland: 6.25% on income over $1 million

Massachusetts: flat 5.3% on all income

Michigan: flat 4.35% of federal AGI with modifications

Minnesota: 7.85% on income over $74,780

Mississippi: 5% on income over $10,000        

Missouri: 6% on income over $9,000

Montana: 6.9% on income over $15,400

Nebraska: 6.84% on income over $27,000

Nevada: no income tax

New Hampshire: 5% on interest and dividend income.  Wages are not taxed.

New Jersey: 8.97% on income over $500,000

New Mexico: 4.9% on income over $16,000

New York: 8.97% on income over $500,000

North Carolina: 7.75% on income over $60,000

North Dakota: 4.86% on income over $373,650

Ohio: 5.925% on income over $200,000

Oklahoma: 5.5% on income over $8,700

Oregon: 11% on income over $250,000

Pennsylvania: flat 3.07% on all income

Rhode Island: 9.9% on income over $373,650

South Carolina: 7% on income over $13,700

South Dakota: no income tax

Tennessee: 6% on interest and dividend income.  Wages are not taxed.

Texas: no income tax 

Utah: flat 5% on all income

Vermont: 8.95% on income over $373,650

Virginia: 5.75% on income over $17,000

Washington: no income tax

West Virginia: 6.5% on income over $60,000

Wisconsin: 7.75% on income over $225,000

Wyoming: no income tax




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