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Taxes & Nevada vs Delaware

Discussion in 'Business & Tax Advice' started by Nancy, Jun 7, 2009.

  1. Nancy

    Nancy Newbie

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    I have a question about how personal income taxes work. I was reading a site about LLCs and Nevada and Delaware. A selling point for Nevada was no personal income taxes. The same is apparently not true for Delaware.

    My question is the following. If you set up a LLC in Delaware but are not a resident there but pay yourself a salary from the LLC (via S classification), do you have to pay personal income taxes in Delaware? If not, is there any tax benefit from a personal perspective to forming an LLC in Nevada over Delaware?

    Thanks.
     
  2. innocent

    innocent Junior Member

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    Well, you are going to pay state income tax in whatever state YOU file your personal taxes. So, it really doesn't matter where your "employer" (your S Corp) is located. It matters only in which state YOU reside.
     
  3. nianain

    nianain Junior Member

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    There can be a lot of extra paperwork involved with forming outside of the state you reside in. Unless you are doing a lot of business, it may not even be worth it.