Wyoming LLC Taxes: What are the Requirements?

wyoming llc taxes

Wyoming LLCs benefit from one of the most tax-friendly structures in the United States. Wyoming charges no state income tax, corporate income tax, or franchise tax on LLCs. Members only need to pay federal taxes and comply with basic sales tax requirements if selling taxable goods or services.

Choose Start in Wyoming to form an LLC with a local attorney. Our formation package includes LLC formation with an attorney, attorney-client privilege, EIN filing, and a U.S. office address with proof of address documents. This is everything you need to start a professional U.S. company and open accounts with banks and payment processors. 

Wyoming LLC Tax Filing Requirements

Wyoming LLCs are not subject to state income tax. LLC owners file federal income taxes based on their classification (e.g., sole proprietorship, partnership, or corporation). 

Specific tax obligations may vary based on an LLC’s income, activity, and structure. We recommend speaking to a tax professional to understand your tax liability. 

Your filing requirements can include:

  • Federal Tax Returns. File based on your LLC’s structure:
    • Single-member: Form 1040 with Schedule C
    • Multi-member: Form 1065 with K-1s for members
    • S-Corporation election: Form 1120S
    • C-Corporation election: Form 1120

For LLCs with employees:

  • Withholding income and FICA taxes
  • Filing quarterly Form 941 reports
  • Submitting annual Form 940 for unemployment tax

Foreign-owned single-member LLCs have additional requirements, including Form 5472 and pro forma Form 1120 filings, regardless of income.

Wyoming Single-Member LLC Tax

As a single-member LLC owner in Wyoming, your business will be treated as a disregarded entity for federal tax purposes. This means reporting all business income and expenses on your personal tax return.

Key aspects of single-member LLC taxation:

  • Report business income and expenses on Form 1040 typically using Schedule C. 
  • Pay self-employment tax at a rate of 15.3% on your profits. This self-employment tax is made up of Social Security and Medicare taxes. 
  • File your returns as a sole proprietorship by default. 

You’ll need to track your business income and expenses separately from your personal finances, even though they’re reported on the same tax return.

Since Wyoming doesn’t have a state income tax, you won’t need to file state income tax returns. However, you’re still responsible for:

  • Federal income tax on your profits
  • Self-employment tax payments
  • Quarterly estimated tax payments if required
  • Maintaining accurate financial records for tax reporting

Wyoming Multi-Member LLC Tax

Multi-member LLCs in Wyoming will be treated as a pass-through entity. Similar to single-member LLCs, this means that members are taxed on an individual level rather than a business level. 

Key Tax Requirements:

  • Submit Form 1065 
  • Issue Schedule K-1 forms to all LLC members
  • Each member reports their share of profits/losses on personal tax returns
  • Members pay taxes at their individual tax rates

Wyoming LLC Taxed as an S-Corp

Wyoming LLC owners can choose to elect S-corporation tax status to reduce their self-employment tax burden. This is typically only advised for an LLC generating considerable and consistent profits. 

An S-corp can provide dividends to members as well as a reasonable salary. This means members can avoid paying self-employment tax on the dividends, possibly saving money. 

S-corps still get taxed as a pass-through entity, so members will report taxes on a personal tax return. They also get the same level of LLC liability protection. 

Wyoming LLC Taxed as a C-Corp

Converting your Wyoming LLC to C-corporation tax status is normally reserved for businesses seeking outside investment.

By filing IRS Form 8832, you’ll establish a corporate tax structure that can make your business more attractive to potential investors while maximizing available tax deductions.

Key benefits of C-corp taxation include:

  • Federal corporate tax rate of 21% on profits
  • No state-level corporate income tax in Wyoming
  • Enhanced credibility with investors
  • Broader range of available tax deductions

To elect C-corporation tax status:

  1. Complete and submit Form 8832 to the IRS
  2. Begin filing annual Form 1120 for tax reporting
  3. Maintain detailed corporate financial records
  4. Track shareholder distributions carefully

You’ll need to weigh the advantages against more complex compliance requirements. While you’ll face double taxation on distributed profits, the lack of Wyoming state corporate tax helps offset this burden.

The structure’s formality can also provide additional liability protection and make it easier to establish multiple classes of stock, which many investors prefer.

Wyoming LLC Federal Taxes

Your federal tax obligations will vary depending on your LLC’s setup:

  • If you’re a single-member LLC, you’ll report your business income and expenses on Form 1040, specifically on Schedule C. This treats your LLC as a sole proprietorship for tax purposes.
  • For multi-member LLCs, you must file Form 1065 and distribute Schedule K-1s to all members, reporting each person’s share of profits and losses.
  • When operating as a C-corporation, you’ll file Form 1120 to report corporate income.
  • If you’ve elected S-corporation status, you’ll need to submit Form 1120S.

You’re still responsible for self-employment taxes if you actively participate in the business operations. While Wyoming doesn’t impose state income tax, you can’t escape these federal obligations.

Make sure to maintain accurate records throughout the year to make your tax filing process easier. 

Does Wyoming Have a State Income Tax?

Wyoming stands as one of the few U.S. states that doesn’t collect any state income tax, making it particularly attractive for LLC owners and entrepreneurs. 

This means you won’t need to file a state income tax return for your LLC’s earnings, regardless of whether you operate as a single-member or multi-member LLC.

Remember that even though Wyoming doesn’t charge state income tax, you’re still responsible for federal taxes and must report your LLC’s income to the IRS according to your chosen tax classification (default LLC, S-corporation, or C-corporation status).

Wyoming LLC Sales Tax

Wyoming LLCs must collect and remit sales tax if they sell taxable goods or services within the state. The state sales tax rate is 4%, with local jurisdictions adding up to 2% additional tax. LLCs register with the Wyoming Department of Revenue to obtain a sales tax license and file returns regularly.

Taxable goods relate to whether a business has a physical or economic nexus in Wyoming. 

A physical nexus includes selling most tangible personal property, such as clothes, electronics, books, etc. 

An economic nexus includes anyone who makes more than $100,000 in sales in the state in the previous or current calendar year. 

This means if you own an online business that makes sales in Wyoming, you might be subject to sales taxes. SaaS businesses generally don’t need to pay sales tax, as the purchaser does not own the product permanently. 

Tax software and an accountant can help you better understand whether your business owes sales tax. 

Wyoming LLC Tax Benefits

Wyoming has some of the most business-friendly tax benefits in the nation. Wyoming’s tax structure can help your business retain more earnings and simplify compliance.

Key tax benefits you’ll receive:

  • Zero state income tax on personal or corporate earnings
  • No franchise tax obligations
  • Minimal annual reporting fees ($60 base rate)
  • Strong asset protection laws that protect your personal wealth

Is There a Wyoming LLC Franchise Tax?

Unlike most states, you won’t have to deal with a franchise tax when operating your LLC in Wyoming. 

Many states impose a franchise tax, which LLCs have to pay solely to do business in the state. For example, LLCs in Delaware have to pay $300 annually just for existing. Wyoming doesn’t do this. 

Want an Attorney Formed Wyoming LLC?

At Start in Wyoming, every Wyoming LLC is formed and maintained by an attorney. This means you know it’s formed correctly, and you have an experienced contact by your side. 

Our formation service delivers everything needed for a proper business setup, including a registered agent service, EIN filing, 1-hour legal consultation, and a U.S. business address with proof of address documents. 

Still have questions? Contact our team today.