An LLC, explained without the sales pitch
Most sites that explain LLCs are trying to sell you one. We are not. Here is what an LLC actually protects, what it costs, and the one decision that genuinely saves you money.
See if an S corp would save you moneyStart where you actually are
5 routes below, depending on what you already know. If none of them fits, the 4-question test is the fastest way to find out whether you need an LLC at all.
The three things worth knowing
An LLC protects your personal assets, and nothing else. If the business is sued or cannot pay its debts, the people it owes generally reach the business rather than your home and savings. That protection is real, and it depends on keeping business and personal money genuinely separate.
It does not change your tax bill. A single-member LLC files the same Schedule C and pays the same 15.3% self-employment tax as a sole proprietor, charged on 92.35% of net profit. Anyone telling you an LLC saves tax by itself is selling something.
The tax decision is a separate one. Once you have an LLC you can elect S corporation treatment, which splits your profit into salary and distributions and can cut self-employment tax. It also costs real money to run, and it shrinks your qualified business income deduction. Whether it wins depends on your numbers, so we built a calculator that counts all three.
What an LLC costs in your state
Filing fees run from $35 to $500 and the yearly cost varies just as much. Pick your state for the fee, the deadline, and the steps.
- Alabama
- Alaska
- Arizona
- Arkansas
- California
- Colorado
- Connecticut
- Delaware
- Florida
- Georgia
- Hawaii
- Idaho
- Illinois
- Indiana
- Iowa
- Kansas
- Kentucky
- Louisiana
- Maine
- Maryland
- Massachusetts
- Michigan
- Minnesota
- Mississippi
- Missouri
- Montana
- Nebraska
- Nevada
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Ohio
- Oklahoma
- Oregon
- Pennsylvania
- Rhode Island
- South Carolina
- South Dakota
- Tennessee
- Texas
- Utah
- Vermont
- Virginia
- Washington
- West Virginia
- Wisconsin
- Wyoming
Common questions
Does an LLC lower my taxes?
No, not by itself. A single-member LLC is taxed exactly like a sole proprietorship. The tax savings people talk about come from electing S corporation status, which is a separate choice you make after forming.
How much does an LLC cost?
Roughly $35 to $500 once to form, then $0 to $800 a year to keep, depending almost entirely on your state. See our full cost breakdown.
Do I need a lawyer to form an LLC?
For a straightforward single-owner business, no. The filing is short and most states let you do it online. Partners, investors, or a regulated business are worth a lawyer, especially for the operating agreement.
Do I need to file a BOI report with FinCEN?
Not if your LLC was formed in the United States. A FinCEN rule issued in March 2025 narrowed reporting to entities formed under foreign law that register to do business here. Domestic LLCs file nothing.
Should I form my LLC in Wyoming or Delaware?
Almost certainly not. If you operate from your home state you must register there anyway as a foreign LLC, so you pay two sets of fees for one business. Form where you work.