How LLCs are Taxed in NH: A Comprehensive Guide

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How are LLCs taxed in NH?
By default, LLCs themselves do not pay income taxes, only their members do. These taxes are paid to the New Hampshire Department of Revenue Administration (DORA). You can find forms for both tax returns (Form BET and Form NH-1065) on the DORA website. You can also file these returns online using an efile system.
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As a business-friendly state, New Hampshire provides a range of tax advantages to businesses who conduct business there. It’s crucial to comprehend New Hampshire’s tax regulations if you’re thinking about founding a limited liability company (LLC), including if the state levies a franchise tax, state tax, levies on rental revenue, or levies on capital gains. LLC Taxation in New Hampshire

For taxation reasons, LLCs in New Hampshire are considered pass-through entities. Accordingly, the company’s gains and losses are transferred to the owners, who then declare them on their personal tax returns. LLCs do not have entity-level federal income tax obligations, in contrast to C corporations. The income of the business is instead taxed at the personal level.

Due to the absence of a state income tax in New Hampshire, LLCs there are not taxed at the state level. LLCs must still pay federal income tax on their gains, though. The company’s net income, which is computed by deducting expenses from gross revenue, is used to determine this tax. Franchise Tax in New Hampshire

There is a franchise tax in New Hampshire, which is a fee for being able to conduct business there. The franchise tax is applicable to every LLC that has been authorized to conduct business in New Hampshire. The tax is calculated based on the company’s gross revenue or the total value of its in-state real and tangible property.

In New Hampshire, there is a minimum franchise tax of $100 and a rate of $2.70 per $1,000 of taxable value. The tax is due on April 15 of each year. There may be fines and interest charges if the franchise tax is not paid.

NH taxes capital gains and rental income.

Since rental revenue is not taxed in New Hampshire, LLCs that generate rental income are not subject to state income taxes. However, federal income tax is still owed on rental income.

The sale of assets like stocks, homes, or company interests can result in capital gains, which are not taxed in New Hampshire. Capital gains generated by LLCs are not taxed at the state level. Federal income tax is however still levied on capital gains.

In summary, LLCs in New Hampshire are exempt from state income tax but are liable to federal income tax. They must also pay the state’s franchise tax, which is due on April 15 each year. Although there is no state income tax in New Hampshire, capital gains and rental income are nevertheless subject to federal income tax. To make sure you adhere to all applicable tax regulations, it’s crucial to speak with a tax expert if you’re thinking about incorporating an LLC in New Hampshire.

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