A Maryland LLC pays Maryland personal income tax up to 5.75% plus local county taxes on profit that passes through to resident members. The IRS default is pass-through: single-member LLCs are disregarded entities, multi-member LLCs are partnerships, and no federal entity-level tax applies. An S-corp election reduces self-employment tax once net income clears roughly $40,000 to $60,000. This guide covers federal treatment, Maryland state and county tax, self-employment tax, non-resident filings, Form 5472, and BOI reporting in full.
By default the IRS taxes a Maryland LLC as a pass-through: a single-member LLC is a disregarded entity taxed on Schedule C of the owner's 1040, and a multi-member LLC is a partnership that files Form 1065 and issues K-1s. No federal entity-level tax applies in either case. Profit flows to the members and is taxed at their personal rates, which avoids the double taxation a C-corporation faces. The LLC keeps this default unless it files Form 2553 for S-corp treatment or Form 8832 for C-corp treatment. Maryland follows the federal classification for state income tax purposes.
Maryland charges personal income tax up to 5.75% on LLC profit that passes through to resident members, plus local county income taxes on top of the state rate. The LLC itself owes no separate entity-level state income tax on pass-through profit. Because the LLC is a pass-through, the tax lands on the member's personal Maryland return, not on the company. This is a direct contrast with Wyoming and New Mexico structures for owners comparing states. Maryland also charges the $300 annual report (the Personal Property Return) each year, which is a compliance fee rather than an income tax.
An S-corp election on Form 2553 becomes worthwhile once net business income clears roughly $40,000 to $60,000, because the reasonable-salary structure removes self-employment tax from the non-salary portion of profit. Below that range, payroll compliance costs outweigh the savings. With an S-corp election, the owner pays payroll tax on a reasonable salary and takes the remaining profit as a distribution not subject to the 15.3% self-employment tax. Maryland still charges personal income tax up to 5.75% plus county taxes on the total. The election adds payroll filings, so it fits an LLC with steady profit above the threshold.
Default LLC owners pay 15.3% self-employment tax on net business income: 12.4% Social Security up to the annual wage base of $168,600 plus 2.9% Medicare with no cap. This is separate from federal and Maryland income tax. An S-corp election reduces self-employment tax on the non-salary portion of profit once net income clears roughly $40,000 to $60,000, at the cost of running payroll. The self-employment tax funds Social Security and Medicare, so it applies on top of the Maryland personal income tax up to 5.75% and local county taxes a resident member owes.
A non-resident-owned single-member Maryland LLC files Form 5472 with a pro-forma 1120 each year when it is a disregarded entity with foreign ownership. A multi-member LLC files Form 1065 and issues K-1s. US income tax depends on Effectively Connected Income. An LLC with no US Effectively Connected Income owes the Form 5472 information filing but no US income tax on foreign-earned profit. With US Effectively Connected Income, the LLC is subject to US income tax. A non-resident owner may need an ITIN ($299) for personal filing. Anonymousllc.co partners with US tax preparers familiar with non-resident returns.
Form 5472 is an IRS information return required for any US disregarded entity with 25% or more foreign ownership. A non-resident-owned single-member Maryland LLC files it each year alongside a pro-forma Form 1120. The form reports transactions between the LLC and its foreign owner, and the penalty for not filing starts at $25,000. It is an information return, not an income tax return, so it applies even when the LLC owes no US income tax. Anonymousllc.co connects non-resident clients with tax preparers who handle Form 5472 and the pro-forma 1120 together.
A multi-member Maryland LLC files Form 1065 as a partnership and issues a K-1 to each member. No federal entity-level tax applies; members report their share of profit on personal returns. Each member then pays Maryland personal income tax up to 5.75% plus local county taxes on their share, along with self-employment tax on active income. The operating agreement sets the profit and loss allocation the K-1s follow, which is one reason every multi-member LLC needs a written agreement. A multi-member LLC can also elect S-corp or C-corp treatment when that lowers total tax.
Maryland counties levy a local income tax on top of the state rate up to 5.75%, and the combined burden falls on the resident member's pass-through profit. The local rate depends on the member's county of residence. This stacked structure means the effective Maryland tax on LLC profit is higher than the headline 5.75% state rate alone. The LLC does not pay the county tax at the entity level; it passes through to the member's personal return. Owners comparing states weigh this combined rate against Wyoming and New Mexico, which levy no state income tax on LLC profit.
Under the March 21, 2025 FinCEN interim final rule, domestic reporting companies are exempt from beneficial ownership information reporting. Most Maryland LLCs are domestic and currently exempt. Foreign reporting companies, meaning LLCs formed outside the United States that register to do business here, remain obligated to file a BOI report. Anonymousllc.co files BOI reports at $150 per report for entities that still have the obligation and confirms the requirement during intake. A domestic Maryland LLC formed in the US does not file under the current rule.
Maryland charges personal income tax up to 5.75% plus local county taxes on member profit, while Wyoming and New Mexico levy no state income tax on LLC profit. The federal pass-through treatment is identical across all three. This difference drives founders who want lower state tax and privacy to form in Wyoming or New Mexico and foreign-qualify into Maryland when local operations require it. A Maryland resident member still owes Maryland income tax on profit regardless of where the LLC is formed, so the state choice affects entity-level and filing obligations more than a resident's personal rate. Anonymousllc.co reviews the trade-off at intake.
A Maryland LLC files by its federal classification: a single-member disregarded entity reports on Schedule C with the owner's personal Form 1040, a multi-member partnership files Form 1065 and issues K-1s, and an S-corp election files Form 1120-S. A foreign-owned single-member LLC files Form 5472 with a pro-forma Form 1120. Partnership returns on Form 1065 are due the fifteenth day of the third month after the tax year ends, while individual returns on Form 1040 are due the fifteenth day of the fourth month. Members then file a Maryland personal income tax return covering the pass-through profit at up to 5.75% plus local county taxes. Anonymousllc.co connects clients with US tax preparers who handle the federal returns, the Form 5472 information filing for non-resident owners, and the Maryland state return together, so the LLC stays compliant on both the federal and state calendars without the owner assembling a preparer network alone.
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