Hello, jdj20912!
- Do I have to pay any Delaware state taxes as a LLC?
Delaware LLCs that don't do business in Delaware are not required to pay income tax or file Delaware tax returns. However, they must pay a $300 annual franchise tax
- Would there be anything unusual in the reporting of state or federal taxes for the single owner / employee of the LLC? As an employee of the company, you are required by the IRS to receive a salary and file a W-2 to report your wages so that employment taxes can be accurately determined and paid. You will then report this on your personal tax return as you would with any W-2 you received.
- Any other caveats to be concerned about? The biggest thing to be aware of in my opinion, is that you will have to file two tax returns, an individual 1040 and the 1120-S. Also, keep in mind you will now have an additional form, Schedule K-1, 1120-S. to issue from your S-Corp return and then report on your personal 1040.
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Can you offer an opinion on the best strategy for managing payroll for the one owner / employee?
For a business with only one owner and employee, using payroll software tailored for single-person companies can be the most efficient payroll strategy. This type of software can automatically handle calculations, support tax compliance, and reduce time spent on manual data entry. At the same time, it's still important for the business to keep accurate records and separate payroll money from general business funds.
For more information please see:
Please feel free to reach back out with any additional questions or concerns you might have!
Have an amazing rest of your day!
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Terri Lynn
