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Although taxes can be unpleasant, paying taxes is an important part of running a business.
This article will get you started with the basics of West Virginia LLC tax filing requirements, such as federal income tax, West Virginia income tax, and employer taxes.
What taxes does an LLC pay in West Virginia?
After you start a West Virginia LLC (Limited Liability Company), there are two main types of ongoing obligations: filing an Annual Report with the state, and filing taxes.
On this page, we discuss the federal and state tax requirements for your Limited Liability Company.
Each West Virginia LLC has a unique tax situation. This lesson provides you with general resources and an overview of the rules.
Tip: We recommend hiring an accountant to ensure your LLC meets all of its tax obligations.
Get an EIN Number for your LLC
We recommend getting an EIN Number for your LLC. An EIN is also called a Federal Tax Identification Number. They mean the same thing.
Not only will an EIN number be used to open an LLC bank account, but it will also be used for filing taxes with the local, state, and federal governments.
LLC pass-through taxation (who pays the taxes?)
By default, LLCs don’t pay taxes. Instead, the LLC Members are responsible for reporting the income (or losses) on their personal 1040 tax return. The Members pay taxes on any LLC profits. This is because of LLC pass-through taxation.
How are LLCs taxed in West Virginia?
By default, a West Virginia LLC is taxed by the Internal Revenue Service (IRS) based on the number of Members the LLC has. Then the West Virginia State Tax Department honors this and taxes your LLC the same way at the state level.
An LLC with 1 owner (Single-Member LLC) is taxed like a Sole Proprietorship.
An LLC with 2 or more owners (Multi-Member LLC) is taxed like a Partnership.
The above are referred to as the “default status”. Meaning, they are automatically applied based on the number of LLC Members. You don’t have to do anything to get this default status.
Alternatively, you have the option of requesting an “elective status” for your LLC. This is done by filing an extra form with the IRS. Once granted, this elective status means the IRS will treat your LLC as a Corporation (either an S-Corporation or C-Corporation) for tax purposes.
Federal Income Taxes
Now we will explain more about how the IRS treats your LLC for federal taxes.
Single-Member LLC taxes (default status)
The IRS treats all Single-Member LLCs as Disregarded Entities for tax purposes. This just means that the IRS doesn’t expect the LLC to file its own federal income tax return. Instead, the owner of the Single-Member LLC files the return (and pays the federal income taxes).
How the LLC pays federal taxes is determined by who owns the LLC:
- If the LLC is owned by an individual, the LLC is taxed like a Sole Proprietorship.
- If the LLC is owned by another company, the LLC is taxed as a branch/division of the parent company.
Multi-Member LLC taxes (default status)
If an LLC has two or more owners, the LLC is taxed like a Partnership.
The LLC needs to file a 1065 Partnership Return and issue a Schedule K-1 to the LLC owners. The K-1s report each owner’s distributive share of profits. And the K-1 income “flows through” to the owners. The income taxes are then paid by each owner on their personal income tax return (Form 1040).
Husband and Wife LLC taxes
In community property states, a husband and wife LLC has the option to file taxes as a Single-Member LLC (aka Qualified Joint Venture) instead of a Multi-Member LLC.
However, this option isn’t allowed in West Virginia for state or federal income tax purposes. This is because West Virginia is not a community property state.
Instead, a husband and wife West Virginia LLC will be taxed in the default status as a Partnership (unless they elect to have the LLC taxed as an S-Corp or C-Corp).
Electing to have your LLC taxed as a Corporation
Instead of the default statuses above, an LLC can be taxed like a Corporation. We recommend speaking with an accountant before making a corporate election.
There are two types of corporate elections:
- S-Corporation
- C-Corporation
LLC taxed as an S-Corporation (elective status)
By filing Form 2553 with the IRS, your LLC can request to be taxed like an S-Corporation.
Being taxed as an S-Corp can help businesses (with established profits) save money on self-employment taxes.
Tip: There are additional expenses to having your LLC taxed as an S-Corporation. Most new business owners shouldn’t make this tax election until their business is established and revenue is consistent. Once there is at least $70,000 in annual net income per LLC Member, we recommend speaking to your accountant about this option.
LLC taxed as an C-Corporation (elective status)
By filing Form 8832 with the IRS, your LLC can request to be taxed like a C-Corporation.
Being taxed as a C-Corp can help large employers save money on healthcare fringe benefits.
Note: This election is not common. Most of our readers don’t choose to have their LLC taxed as a C-Corporation.
West Virginia Income Tax (West Virginia State Tax Department)
Single-Member LLCs in West Virginia: The LLC itself usually doesn’t file a state-level return. However, the owner files a personal state-level return that includes the LLC’s profits or losses.
Multi-Member LLCs in West Virginia: The LLC itself may need to file a Pass-Through Entity return at the state-level. And the owners file a personal state-level return that include the LLC’s profits or losses.
There are other types of West Virginia business tax that apply to certain industries and types of businesses.
We recommend hiring an accountant to prepare and file your state income taxes.
You can also contact the West Virginia State Tax Department for more information about West Virginia state taxes.
Local Income Tax for West Virginia LLCs
You and/or your LLC may need to file and pay income taxes with your local municipality (town, city, county, etc.).
We recommend hiring an accountant to prepare and file your local income taxes.
You can also contact your municipality to check on their requirements.
West Virginia Sales and Use Tax
If you sell products to people in West Virginia, you may need to collect sales tax and file a Sales and Use Tax Return. You can get the return forms from the West Virginia State Tax Department. West Virginia also has sales and use taxes at the municipal level (cities and towns).
You can read more information about West Virginia sales and use tax from these West Virginia State Tax Department resources:
If you have any questions, you can contact the West Virginia State Tax Department at 304-558-3333.
Tip: Save time by hiring an expert. We recommend using TaxJar. They'll help you register for, collect, and pay sales tax.
West Virginia LLC Tax – FAQs
Do I have to pay an annual fee for my LLC in West Virginia?
Yes, you have to pay an annual LLC fee by filing a West Virginia LLC Annual Report every year. This is separate from the federal, state, and local taxes that you have to pay.
The LLC Annual Report is filed with the West Virginia Secretary of State. It is not a tax paid to the West Virginia State Tax Department.
The Annual Report for West Virginia LLCs costs $25 per year. This is paid every year for the life of your LLC.
How much is an LLC in West Virginia?
West Virginia LLC Costs include:
$100 to form your West Virginia LLC (to file your LLC Articles of Organization).
$30 to obtain the West Virginia Business Registration Certificate (your business license).
$25 in annual fees (to file your LLC Annual Report).
How do I file my LLC taxes in West Virginia?
It depends on what type of LLC you have.
Single-Member LLC taxed as a Sole Proprietorship: You only need to file your personal tax return (Federal Form 1040 and West Virginia Form IT-140) and include your LLC profits on the return.
Multi-Member LLC taxed as a Partnership: Your LLC must file an IRS Form 1065 and a West Virginia Pass Through Entity Return (Form PTE-100). And each Member must file their personal tax return (Federal Form 1040 and West Virginia Form IT-140) as well.
LLC taxed as a Corporation: Your LLC must file tax returns with the IRS and the West Virginia State Tax Department. Check with your accountant to make sure you file all the correct documents.
What is a WV IT 140 Form?
This is the West Virginia personal income tax return. It’s the state version of the IRS Form 1040. All individuals must file this document every year.
How do I know my LLC tax classification?
You just need to look at your EIN Confirmation Letter (CP 575).
If your EIN Confirmation Letter says “SOLE MBR” after your name, your LLC is taxed as a Sole Proprietorship.
If your EIN Confirmation Letter says “MBR” after your name, your LLC is taxed as a Partnership.
If you don’t have your CP 575, you can call the IRS and request an EIN Verification Letter (147C). The 147C letter will also show “SOLE MBR” or “MBR”.
Exception: If your LLC is taxed as a Corporation, the CP 575 doesn’t tell the whole story. You – or your accountant – would have filed a form with the IRS to make the election. And the IRS would have sent you back an Approval Letter. That Approval Letter will confirm which corporate election your LLC made.
If you’re still unsure about how your LLC is taxed, we recommend calling your accountant or the IRS (1-800-829-4933). To speak to a live person at the IRS, press option 1, option 1 again, and then option 3.
How to start an LLC in West Virginia?
Here are the steps to starting an LLC in West Virginia:
- Choose an LLC name and make sure it’s available
- Choose who will be your West Virginia Registered Agent
- Get a Tax ID Number (EIN) from the IRS
- File the West Virginia LLC Articles of Organization
- Get your Business Registration Certificate
- Complete and sign an LLC Operating Agreement
- Open an LLC bank account
References
West Virginia Tax Division: Business Registration
West Virginia Tax Division: Business Tax Information
West Virginia Tax Division: Sales and Use Tax
West Virginia Tax Division: Pass Through Entity (Multi Member LLCs)
West Virginia Tax Division: Individuals (Single Member LLCs)
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.
WEST VIRGINIA LLC GUIDE
Follow the lessons below to form your West Virginia LLC.