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
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
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
- 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.
Tip: The above language often confuses a lot of people. Notice that we said “taxed as”. This means, in the eyes of the law, your Pennsylvania LLC is still a separate legal entity from you, but the IRS is treating your LLC differently, just for tax purposes.
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.
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.
Taxation of Pennsylvania LLC Members
Starting a Business in Pennsylvania (REV-588)
PA Department of Revenue: Forms and Publications
Multi-member Pennsylvania LLC Filing Requirements
Single-member Pennsylvania LLC Filing Requirements
Partnerships, S-Corporations, and Limited Liability Companies