Short answer: A single-member LLC is taxed the same as a sole proprietor (IRS), so what it costs is state fees and paperwork. The first year runs about $375 in Texas, $339 in Florida and $955 in California, including a $125 registered agent, because California charges an $800 LLC tax every year. More in Do You Need an LLC? LLC vs. Sole Proprietor.
Check our math
Here is the result above, step by step, using the numbers already filled in.
- Formation and one-time state costs$0 + $0 = $0
- Yearly costsannual report and LLC tax $0 + registered agent $125 = $125
- DBA fee you'd skip as an LLC−$50
- First-year cost$0 + $125 − $50 = $75
- Over five years$75 + $125 × 4 = $575
- Yearly cost as a share of profit$125 ÷ $40,000 = 0.3%
With no state chosen, only the registered agent and DBA fee count. Choose your state above, or see the table below.
How this calculator works
Forming an LLC doesn't change your taxes unless you elect to be taxed as a corporation. A single-member LLC files the same Schedule C and pays the same self-employment tax as a sole proprietor. What you get is a legal line between the business and you: business debts and lawsuits generally stay with the LLC, as long as you keep business money separate and sign contracts in the LLC's name.
What you pay for it: a filing fee to form the LLC, a yearly or every-other-year report, in some states a yearly LLC tax, and a registered agent if you don't act as your own. New York also requires a published notice of formation. A sole proprietor using a business name may need a DBA filing instead, which the LLC replaces.
The verdict compares the yearly cost with your profit: under 1% is a low price for the protection, over 3% is expensive for now. Business insurance covers different risks and many owners buy it first.
LLC cost by state
| State | Formation and one-time | Report and LLC tax | First year | Five years |
|---|---|---|---|---|
| California | $70 | $810/yr | $955 | $4,695 |
| Texas | $300 | $0/yr | $375 | $875 |
| Florida | $125 | $139/yr | $339 | $1,394 |
| New York | $700 | $5/yr | $780 | $1,298 |
| Pennsylvania | $125 | $7/yr | $207 | $735 |
| Illinois | $150 | $75/yr | $300 | $1,100 |
| Ohio | $99 | $0/yr | $174 | $674 |
| Georgia | $110 | $60/yr | $245 | $985 |
| North Carolina | $125 | $200/yr | $400 | $1,700 |
| Michigan | $50 | $25/yr | $150 | $750 |
Includes a $125 registered agent each year and subtracts a $50 DBA fee. State fees checked October 2026 on state filing sites.
Worked examples
California consultant
$40,000 of profit, forming in California.
| Result | |
|---|---|
| First-year cost | $955 |
| Then each year | $935 a year |
| Verdict | Moderate: worth it if you have real liability risk |
New York designer
$40,000 of profit in New York, where the publication requirement adds a one-time cost.
| Result | |
|---|---|
| First-year cost | $780 |
| Five years | $1,298 |
| Verdict | Low cost for the protection |
Using your result
Decide what you're protecting. If the business has clients who could sue, a lease, employees or debt, an LLC is usually worth its yearly cost. If it's a small side business with little risk, insurance may matter more than the entity.
If you're still a sole proprietor, an LLC can be added later; it doesn't have to be the first step. Many owners start with insurance and a separate bank account, then form the LLC once the business has clients and contracts.
If you form one, open a business bank account in the LLC's name, use it for everything, and keep your registered agent and annual report current. At about $50,000 of profit or more, also check the S-corp tax calculator: an LLC can elect S-corp taxes, which is where the tax savings come from. In California and New York City, read S-Corp Tax in California and New York City first.
What it doesn't cover
- Fees are for the 10 states we've added; for others, enter your state's fees.
- County or city business licenses apply either way and aren't included.
- Some states charge more above certain revenue levels, such as California's LLC fee at $250,000 of gross receipts.
- It doesn't put a value on liability protection; that depends on your risks.
Read more
- Do You Need an LLC? LLC vs. Sole Proprietor
- LLC vs. S-Corp: When Does an S-Corp Actually Save You Money?
- S-Corp Tax in California and New York City
Frequently asked questions
Is an LLC worth it for a small business?
Usually, if the business has real liability risk: clients, a lease, employees or debt. It costs state fees each year and doesn't lower taxes by itself.
Does an LLC save on taxes?
Not by itself. A single-member LLC is taxed like a sole proprietor. Tax savings come from electing S-corp taxes once profit is high enough.
How much does an LLC cost in California?
About $955 the first year with a registered agent, then about $935 a year, mostly the $800 yearly LLC tax.
How much does an LLC cost in Texas?
About $375 the first year: the $300 filing fee plus a registered agent. Texas has no annual report fee for most small LLCs, though the franchise tax report must still be filed.
Can I form an LLC in another state, like Delaware?
You can, but most small businesses then also have to register in the state where they operate, paying both states' fees. For a local business, forming at home is usually simpler and cheaper.
How much does an LLC cost in Florida?
About $339 the first year with a registered agent, including the $125 filing fee and the $138.75 annual report due by May 1.
Do I need a registered agent?
Every LLC needs one: a person or company with a physical address in the state who accepts legal papers. You can be your own if you're at that address during business hours.
Sources
Reviewed against IRS sources: October 2026 · Updated October 2026 · By the NetTakeHome team. Estimates for planning, not tax, legal or financial advice.