Washington DC LLC Taxes: The Complete Filing Guide (2025)

Washington DC LLC Tax Basics

Navigating your Washington DC LLC tax obligations doesn’t have to be complicated. We’ll walk you through the essentials of pass-through taxation, explain Washington DC’s specific requirements, and highlight strategies to stay compliant and organized. This guide covers everything from federal income taxes to city-specific requirements and filing deadlines.

Use the links below to jump directly to the section you need:

• Washington DC LLC Taxes at a Glance
• Understanding LLC Taxation Basics
• Federal Tax Obligations
• Washington DC State Taxes
• Tax Calendar and Filing Tips
• Tax Strategies for Washington DC LLCs
• Forms and Resources

Washington DC LLC Taxes at a Glance

Tax Type	Rate	Filing Deadline	Forms Required
Federal Income Tax	10-37% (personal brackets)	April 15, 2025	Form 1040 + Schedule C or Schedule E/K-1
Self-Employment Tax	15.3%	April 15, 2025	Schedule SE
Washington DC Income Tax	4%-10.75%	April 15, 2025	Form D-40
Washington DC Corporate Franchise Tax	8.25% (flat rate)	April 15, 2025	Form D-20
Washington DC Unincorporated Business Franchise Tax	8.25% (flat rate)	April 15, 2025	Form D-30
Federal Payroll Taxes (If Employees)	7.65% employer + 7.65% employee (FICA)	Quarterly (April 30, July 31, October 31, January 31)	Form 941
Washington DC Unemployment Tax (If Employees)	1.9%-7.4% (new employers: 2.7%)	Quarterly (April 30, July 31, October 31, January 31)	Form DOES-UC-30
Federal Unemployment (FUTA)	6% on first $7,000 per employee (0.6% after credits)	January 31, 2026 (annual)	Form 940
Sales & Use Tax	6% (some exceptions apply)	Monthly, quarterly, or annually based on sales volume	Filed online
Biennial Report	$300 fee	April 1 (every two years)	Form BRA-25

Understanding LLC Taxation Basics

How Washington DC LLCs Are Taxed By Default

Your Washington DC LLC doesn’t pay taxes itself. Instead, profits flow through to you and your members, who report them on personal tax returns. This is called pass-through taxation.

Here’s how it works:

1. Your LLC earns income from business activities
2. The LLC itself files no tax return (unless you elect otherwise)
3. Profits “pass through” to members based on ownership percentage
4. Each member reports their share on their personal tax return
5. Members pay tax at their individual income tax rates

What this means for you: Unlike corporations, your business profits are only taxed once, which typically saves money.

Tax Classification Options

While pass-through taxation is the default, your Washington DC LLC can choose alternative tax treatments:

Default LLC Tax Status:

• Single-member LLC: Taxed as a sole proprietorship
• Multi-member LLC: Taxed as a partnership

Optional Tax Classifications:

• S Corporation: Can reduce self-employment taxes by paying “reasonable salaries”
• C Corporation: LLC pays corporate tax on profits, members pay personal tax on distributions (creates double taxation)

Not sure which tax classification is right for your business? Schedule a free consultation with 1-800Accountant.

Federal Tax Obligations

Income Tax

As a Washington DC LLC owner, you’ll report your share of business profits on your personal tax return using:

• Form 1040 + Schedule C (single-member LLCs)
• Form 1040 + Schedule E + Schedule K-1 (multi-member LLCs)

Federal income tax rates range from 10% to 37% based on your tax bracket (actual brackets will depend on inflation adjustments and any tax law changes).

Simply Put: Whatever money your business makes (after expenses) gets added to your personal tax return, just like income from a job.

Self-Employment Tax

LLC members actively involved in the business must pay self-employment tax of 15.3% (covering Social Security and Medicare) on their share of LLC profits.

Key points:

• Applies to net earnings of $400 or more
• Calculated on Schedule SE
• You can deduct 50% of the self-employment tax as an “above-the-line” deduction, which lowers your adjusted gross income

What happens if I miss this payment? The IRS charges penalties of 0.5% per month plus interest. However, first-time mistakes can often qualify for penalty abatement if you have a clean compliance history.

Employment Taxes

If your LLC has employees, you must:

• Withhold federal income tax
• Pay and withhold FICA taxes (7.65% each for employer and employee)
• Pay federal unemployment tax (FUTA)
• File quarterly employment tax returns (Form 941)
• Provide W-2 forms annually

Estimated completion time: 2-3 hours per quarter (significantly less with payroll software or professional help)

Estimated Tax Payments

Because no tax is withheld from your LLC profits, you’ll likely need to make quarterly estimated tax payments using Form 1040-ES. These payments cover both income and self-employment taxes on your share of the business income. Missing deadlines or underpaying can lead to IRS penalties, even if you pay in full later.

Working with an accountant can help ensure accurate calculations, on-time payments, and a smarter overall tax strategy.

Key deadlines:

• April 15
• June 16
• September 15
• January 15

Pro Tip: Set calendar reminders 15 days before each deadline. This gives you time to prepare without the last-minute rush that leads to mistakes.

Washington DC Taxes

Washington DC Income Tax

Washington DC has a personal income tax rate of 4%-10.25% that applies to your LLC’s profits on your personal return.

Filing requirements:

• Use Washington DC Form D-40
• Due April 15, 2025
• Rate varies based on income 

Washington DC Corporate Income Tax 

If you’ve elected to have your LLC taxed as a C corp, you will be subject to Washington DC’s 8.25% corporate income tax. 

Filing requirements: 

• Use Washington DC Form D-20
• Due April, 2025

Washington DC Unincorporated Business Tax 

If you’ve elected to have your LLC taxed as a pass-through entity for federal income tax purposes, all LLC members are required to report an 8.25% unincorporated business tax. 

Filing requirements:

• Use Washington DC Form D-30
• Due April 15, 2025
• $250 minimum fee for businesses with gross receipts of $1 million or less
• $1000 maximum fee for businesses with gross receipts that exceed $1 million 

Sales and Use Tax

If your Washington DC LLC sells physical products or certain services:

• Collect 6% sales tax on taxable sales
• Obtain a business license through the My DC Business Center
• Register your business through MyTax DC or by using Form FR-500
• File and pay collected taxes monthly, quarterly, or annually based on sales volume
• Due dates vary based on filing frequency

60-Second Check: Do I Need to Collect Sales Tax?

• Do you sell physical products in Washington DC? → Yes, collect tax
• Do you sell digital products? → Yes, collect tax
• Do you provide services? → Most services are exempt (see exceptions below)
• Do you sell online to Washington DC customers? → Yes, collect tax

Services subject to sales tax include: 

• Real property maintenance services 
• Landscaping 
• Data processing services 
• Information services

Sales with higher sales and use tax rates: 

• Soft drinks (8%) 
• Restaurant meals and beverages (10%)
• Hotels (14.95%) 
• List of taxable sales and rates

Payroll Taxes 

If you have employees in Washington DC, you will be responsible for two types of payroll taxes. 

Unemployment Insurance (UI) Tax 

• Register your business through DC Department of Employment Services 
• Use Washington DC Form DOES-UC30
• Rate is 2.7% for new employers (1.9%-7.4% afterwards) 
• Due quarterly 

Withholding Tax 

• Register your business through MyTax DC (if you haven’t already) 
• Flat rate of 4%-10.75% 
• Due monthly, quarterly, or annually 

Biennial Report Filing

While not a tax, your Washington DC LLC must file a biennial report:

• Due April 1 each year
• $300 filing fee
• Filed online or by mail using Form BRA-25 

Calendar Alert: Set a reminder for March 1 to ensure you don’t miss this easy but required filing.

Property Taxes

If your LLC owns real property in Washington DC:

• Rates vary by classification ($0.85 per $100 in value to $10.00 per $100 in value) 
• Property tax bills are issued twice a year 
• May qualify for various exemptions based on business type

Tax Calendar and Filing Tips

Key Deadlines for Washington DC LLCs

January:

• January 15: Final estimated tax payment for previous year
• January 31: Issue W-2s/1099s to employees/contractors
• January 31: Fourth quarter payroll tax payment due (state and federal) 

March: 

• March 31: First real property tax payment due 

April:

• April 1: Biennial Report due (every two years) 
• April 15: Personal tax returns due
• April 15: Federal income and self-employment tax returns due
• April 15: First quarter estimated tax payment due 
• April 30: First quarter payroll tax payment due (state and federal) 

June: 

• June 16: Second quarter estimated tax due 

July: 

• July 31: Second quarter payroll tax payment due (state and federal)

September:

• September 15: Second real property tax payment due 
• September 15: Third quarter estimated tax payment due

October:

• October 31: Third quarter payroll tax payment due (state and federal) 

Record-Keeping Checklist

Keep these records for at least 7 years:

• Business income records (invoices, receipts)
• Expense receipts and documentation
• Bank and credit card statements
• Asset purchase and improvement records
• Vehicle mileage logs
• Home office documentation
• Payroll records
• Previous tax returns

Tax Strategies for Washington DC LLCs

S Corporation Election Benefits

Converting your LLC to an S Corporation for tax purposes can save on self-employment taxes:

1. File Form 2553 with the IRS
2. Pay yourself a “reasonable salary” subject to employment taxes
3. Take remaining profits as distributions exempt from self-employment tax

Example: An LLC making $100,000 in profit pays 15.3% self-employment tax on the entire amount. As an S Corp, if $60,000 is a reasonable salary and $40,000 is taken as distributions, only the $60,000 is subject to employment taxes.

Potential Savings: In this example, you’d save about $6,120 in self-employment taxes.

Business Expense Deductions

Common deductions Washington DC LLC owners often overlook:

• Home office deduction
• Business mileage (70¢ per mile for 2025)
• Health insurance premiums
• Retirement plan contributions
• Professional development expenses
• Business meals (50% deductible)

Forms and Resources

Federal Tax Forms

• Schedule C: Profit or Loss From Business (sole proprietors)
• Form 1065: U.S. Return of Partnership Income
• Schedule K-1: Partner’s Share of Income, Deductions, Credits
• Form 1120-S: U.S. Income Tax Return for an S Corporation
• Form 2553: Election by a Small Business Corporation (S Corp)
• Form 8832: Entity Classification Election

Washington DC Tax Forms

• Form D-40: Washington DC Individual Income Tax Return
• Form D-20: Washington DC Corporate Income Tax Return
• Form D-30: Washington DC Unincorporated Business Franchise Tax 
• Form DOES-UC-30: Washington DC Unemployment Insurance Tax Return
• Form BRA-25: Washington DC Biennial Report

Helpful Resources

• Washington DC Office of Tax and Revenue
• MyTax DC
• Internal Revenue Service
• Washington DC Department of Employment Services