Pennsylvania LLC Taxes

Note: Our tax lesson is not as step-by-step as our other forming an LLC in Pennsylvania lessons, due to the uniqueness and variation among businesses in Pennsylvania. Taxes are usually not as straightforward as forming an LLC, and therefore, the information below is an overview, and not a comprehensive guide.

You will most likely need to hire a tax professional in Pennsylvania to make sure you meet all your state and local tax obligations. We recommend using Thumbtack or reading our How to Find an Accountant guide.

Do it yourself in Pennsylvania

Pennsylvania Department of Revenue
717-787-1064
PA Department of Revenue: Contact Information

Registering for Pennsylvania Business Taxes Online
PA Department of Revenue: PA Business Tax e-Services

Pennsylvania General Tax Overview
PA Department of Revenue: General Tax Information

PA-100 (Sales Tax)
PA Department of Revenue: Online Business Entity Registration (PA-100)

Sales, Use, and Hotel Occupancy Tax
PA Department of Revenue: Sales, Use and Hotel Occupancy Tax Forms

Pennsylvania Employer Withholding Tax
PA Department of Revenue: Employer Withholding Forms

Local Income Tax
PA DCED: Local Income Tax Information

Other Taxes
Depending on your industry, where your Pennsylvania LLC is located, how you are taxed by the IRS, and whether or not you have employees, will determine which additional taxes and forms are due.

• Some examples of other taxes and forms due are:
• Motor and Alternative Fuel Taxes
• Employer Withholding
• Sales, Use and Hotel Occupancy Tax
• Cigarette Tax
• Malt Beverage and Liquor Tax
• Pari-mutuel
• Amusement Ticket License
• Keystone Opportunity Zones (KOZ)
• Neighborhood Improvement Zones (NIZ)
• Motor Carrier Road Tax/IFTA
• Motor Fuels Tax
• Alternative Fuels Tax
• Public Transportation Assistance Fund/Vehicle Rental Tax
• Small Games of Chance
• Local taxes

Your Pennsylvania LLC and Federal Taxes with the IRS:

The default tax status with the IRS is as follows:

• Single-member Pennsylvania LLCs are taxed as Sole Proprietorships.
• Multi-member Pennsylvania LLCs are taxed as Partnerships.

The bulleted list above refers to state and local taxes, not federal taxes filed with the IRS.

Remember, the income/losses from your Pennsylvania LLC will “flow through” to your personal 1040 tax return on a Schedule C, as well as additional Schedules depending on how you derive your income.

Technically, your Pennsylvania LLC is still a legal entity with the state and the law, but your LLC is a “tax entity” with the IRS.

Additionally, you may want to have your LLC taxed as an S-Corp in order to save money on self-employment taxes. Typically your LLC’s net income should be around $70,000 per year (per Member) in order for the tax savings to be worth the additional administrative costs of maintaining an LLC taxed as an S-Corp.

Local Taxes for PA LLCs

In addition to Pennsylvania state taxes, you also need to file and pay local taxes. For example, to your city, township, county, or borough. Again, it depends on where you are located and what type of business you are in; and we recommend seeking professional assistance.

Our Recommendation for Pennsylvania LLCs

Calculating your tax obligations in Pennsylvania (and with the IRS) can be complicated and if done improperly can negatively impact your LLC.

We recommend that you get help from a tax professional once your Pennsylvania LLC is formed. You can use Thumbtack, Yelp, or check out our guide on How to Find an Accountant.

Hiring a tax professional will not only help you keep your Pennsylvania LLC in compliance, but it will also give you an advisor to go to for other business questions.

You’ll want someone who’s a good fit for your company, makes you feel comfortable, and is willing to answer all of your questions. It should be someone you like personally as well as professionally. We recommend talking with at least 2-3 people before making your final decision.

Matt Horwitz

Founder & Educator, LLC University®

Matt Horwitz has been the leading expert on LLC education for the past decade. He founded LLC University in 2010 after realizing people needed simple and actionable instructions to start an LLC that other companies weren't offering. He's cited by Entrepreneur Magazine, Yahoo Finance, and the US Chamber of Commerce, and was featured by CNBC and InventRight.
 
Matt holds a Bachelor's Degree in business from Drexel University with a concentration in business law. He performs extensive research and analysis to convert state laws into simple instructions anyone can follow to form their LLC - all for free! Read more about Matt Horwitz and LLC University.