A New York LLC is a pass-through by default: the IRS treats a single-member LLC as a disregarded entity and a multi-member LLC as a partnership, with profit flowing to owners. New York personal income tax reaches up to 10.9%, plus New York City tax where it applies, and New York charges an annual LLC filing fee tied to state-source gross income. An S-corp election saves self-employment tax once net income clears $40,000-$60,000. Non-resident owners with no US effectively connected income file a Form 5472 information return but owe no US federal income tax on foreign-earned profit.
A New York LLC is a pass-through entity by default, with no federal entity-level income tax. 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 to members. Profit flows to the owners and is taxed at their personal rates rather than at the LLC level. This default applies to every New York LLC unless the owners file an election to be taxed as an S-corporation or C-corporation. The pass-through structure avoids the double taxation that applies to a standard C-corporation, where profit is taxed once at the entity and again when distributed to owners.
Yes. New York personal income tax reaches up to 10.9% on income that passes through to owners, plus New York City tax for residents and businesses operating in the city. The rate rises across brackets with income. Because a New York LLC is a pass-through, the LLC itself pays no entity-level income tax, but each owner reports their share on a personal New York return. This contrasts with Wyoming, New Mexico, and Nevada, which levy no state income tax. New York-source income remains taxable in New York even when the LLC is formed in another state and foreign-qualified. A New York resident pays New York tax on the LLC's full pass-through profit regardless of where the LLC is formed, since New York taxes residents on worldwide income. A non-resident owner pays New York tax only on the portion of profit sourced to New York activity.
New York charges an annual LLC filing fee tied to New York-source gross income for LLCs treated as partnerships or disregarded entities. This fee is separate from the personal income tax owners pay on pass-through profit. The fee scales with the LLC's New York-source gross income, so a small single-member LLC pays the minimum tier and larger LLCs pay more. It is filed alongside the LLC's New York tax paperwork. This income-based filing fee is one reason total New York tax compliance runs heavier than in the four anonymous states.
A New York LLC benefits from S-corp taxation once net income clears $40,000-$60,000, because the S-corp election splits income into a reasonable salary and distributions, and the distribution portion avoids the 15.3% self-employment tax. The election is made by filing IRS Form 2553. Below that income range, the payroll compliance cost of running an S-corp outweighs the self-employment tax saved. Above it, the savings grow with income. An S-corp adds payroll filings, a reasonable-salary requirement, and a separate Form 1120-S return. New York recognizes the federal S-corp election but requires a separate state-level S-corp election to match it.
A default New York LLC owner pays 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 on top of federal and New York income tax. An S-corp election reduces the self-employment tax by moving the distribution portion of profit outside the 15.3% base, though it adds payroll compliance. High earners also pay an additional 0.9% Medicare surtax above the threshold. Self-employment tax is a federal obligation that applies regardless of which state the LLC is formed in.
A non-resident who owns a US LLC with no US effectively connected income owes no US federal income tax on foreign-earned profit, but must file a Form 5472 information return each year for a foreign-owned single-member LLC. The LLC still exists as a US entity for tax purposes. A foreign-owned single-member LLC files Form 5472 with a pro-forma Form 1120. A multi-member LLC files Form 1065 and issues K-1s. New York-source income earned in the state is taxable in New York regardless of the owner's residence. Anonymousllc.co partners with US tax preparers experienced in non-resident filings.
Form 5472 is a federal information return required for any US disregarded entity with 25% or more foreign ownership. A non-resident-owned single-member New York LLC files it annually alongside a pro-forma Form 1120. Form 5472 reports transactions between the LLC and its foreign owner, such as capital contributions and distributions. It is an information return, not an income tax return, so filing it does not by itself create a US tax bill. Missing it carries a $25,000 penalty, so non-resident owners treat it as a firm annual deadline. Anonymousllc.co's tax partners prepare it for foreign-owned LLCs.
A non-resident who owes US personal income tax files with an ITIN, which Anonymousllc.co obtains for $299. The LLC itself uses an EIN, priced at $99 on its own, for its Form 5472 and pro-forma 1120. An owner with no US-source income files only the EIN-based information return and does not need an ITIN. An owner with US effectively connected income needs an ITIN to file a personal US return. The EIN is included in every Anonymousllc.co formation package, and the ITIN is added when personal US tax filing applies.
Most New York LLCs are exempt from BOI reporting. Under the March 21, 2025 FinCEN interim final rule, domestic reporting companies are exempt, and a New York LLC formed in the US is a domestic company. Foreign reporting companies, meaning LLCs formed outside the US that register to do business in a US state, remain obligated to file BOI reports. A US-formed New York LLC does not currently file a BOI report under the interim rule. Anonymousllc.co files BOI reports at $150 per report for entities that remain obligated.
Forming in Wyoming removes state income tax at the entity's home state, since Wyoming levies none, but New York-source income stays taxable in New York once the LLC foreign-qualifies and operates there. Federal pass-through tax is identical in both states. A Wyoming anonymous LLC that operates in New York registers as a foreign LLC and pays New York tax on New York-source income, plus the New York LLC filing fee. The Wyoming route is chosen for ownership privacy and lower formation cost rather than to escape New York tax on income earned in New York. See /wyoming-anonymous-llc/.
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