Forming an LLC is a popular choice for attorneys and executives seeking financial protection and tax benefits. Yet, those who have just formed an LLC in New York will face a steep learning curve when it comes to paying taxes. Not only must the LLC initially register for taxes with the New York State Department of Taxation and Finance, but the LLC will also be subject to ongoing filing and reporting requirements.

To simplify the sometimes complicated world of LLC taxes, the following is a comprehensive guide on tax basics and best practices for start-up LLCs in New York. From tax registration and initial tax payments, to estimated taxes, filing taxes on time, and keeping up with new tax laws, this guide will help New York businesses get off to a smart start for the 2021 tax year.

Registering for Taxes with the New York State Department of Taxation and Finance

The first step for New York LLCs is to register for taxes with the New York State Department of Taxation and Finance. Obtaining a Certificate of Authority from the New York Department of Taxation and Finance is the first step to ensuring that you're in alignment with the state’s tax laws. When registering as a limited liability company, application Form DTF-17 is required and should be submitted along with the required filing fee.

Primary documents related to the LLC’s formation must be included in the application packet and the application packet must fully explain the LLC’s activities. This is a fundamental piece of the process and must be completed properly.

The filing fee for the Certificate of Authority is a non-refundable $50. This fee must be paid when the application is submitted, so it’s important to have it taken care of ahead of time.

Initial Tax Payments and Obligations

When forming an LLC in New York, there are a number of other tax obligations the business will need to be aware of. In addition to registering with the Department of Taxation and Finance, LLCs are required to submit a Security Statement, issue a Business Identification Number, and pay for the Employment Solutions Services.

LLCs that are registered in New York are obligated to pay state taxes, as well as any applicable town or city taxes. New York also requires LLCs to charge sales tax on purchases, including goods, services, food, alcohol, clothing, construction materials, and prescriptions. The sales tax rate will vary depending on the locality.

In addition, LLCs in New York must also pay unemployment insurance taxes to the state. This is a quarterly payment that must be sent in with Form NYS-45, which is due by the last day of the month that follows the end of the quarter.

Filing Your Taxes On-Time in New York

When filing taxes, LLCs must adhere to the filing deadlines for taxes. These deadlines are firm and must be adhered to, so it’s best to be proactive and take care of any filing requirements well before the applicable deadline.

In New York, LLCs must file either the form IT-204 or the form IT-204-LL. The due date for this filing is usually March 15th for the previous tax year. When filing taxes, LLCs must disclose the reportable income from rentals, interest, and any other sources as well as any mandatory deductions taken from the income.

For those who are unsure how to complete their tax forms, there are a number of resources available online, such as the New York State Tax Department website,, or tax guides published by the New York State Bar Association.

Estimated Taxes for New York LLCs

When filing taxes, LLCs must also pay estimated taxes to the Internal Revenue Service. LLCs can submit these taxes to the IRS using either Form 1102 or Form 1040-ES. When submitting payments for estimated taxes, the LLC must include a check or money order for any estimated taxes due.

Estimated taxes are due four times a year with the payment deadlines generally being April 15th, June 15th, September 15th, and January 15th of the following year. LLCs typically have the option of paying estimated taxes over the course of the year or in one lump sum at the end of the year.

Tax Reduction Strategies for New York LLCs

In addition to keeping up with filing deadlines and paying taxes on time, New York LLCs will need to understand how to take advantage of income tax deductions and other tax reduction strategies. This includes research and understanding the various state and federal tax incentives being offered, such as the Qualified Business Income Deduction, the Teacher and First Responder Tax Deduction, the Foreign Tax Credit, and Tax Free Retirement Accounts.

LLCs in New York will also want to consider tax planning strategies to maximize deductions and minimize taxes owed. Business owners should keep meticulous records of all income and deductions, be aware of changes in local, state, and federal tax laws, and keep their strategies up-to-date.

Recruiting Legal Support from New York Business Attorneys

Navigating LLC taxes in New York can be a daunting experience, so it’s important to seek out qualified legal support when needed. New York business attorneys are knowledgeable about the state’s regulations and can provide personalized guidance on the best strategies for LLCs.

Most business attorneys also offer specific services for businesses, such as advice on how to structure the business for tax purposes and offers counseling on the various types of business entities such as LLCs, Corporations, S Corporations, etc.

When searching for an attorney, it pays to look for reviews, experience level, and price. Fortunately, when it comes to finding an attorney, the internet has made it easier than ever to find quality legal counsel.

From trusted websites such as UpCounsel, individuals and organizations can find licensed attorneys with experience in a variety of fields – including taxes, corporate law, and business formation. UpCounsel’s network of experienced attorneys have an average of 14 years’ experience, their profiles clearly displays ratings and reviews of their work, and you can access high-quality legal services on-demand.

In summary

Forming an LLC in New York comes with a number of tax obligations and filing requirements, so it’s important for LLCs to stay up-to-date on all the newest regulations and to act proactively when it’s time to pay taxes.

It’s also essential to take advantage of available tax incentives and seek legal counsel when needed. Fortunately, the internet and UpCounsel have made it easier than ever to find experienced business attorneys who can provide quality legal assistance on taxes and other matters related to LLCs.

So whether you’re just starting out or have had your LLC registered in New York for years, this guide serves as an excellent introduction to understanding taxes for local LLCs.


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