Taxes & Nevada vs Delaware

Nancy

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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.
 
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.
 
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.
 
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