Maine LLC Tax Basics

Navigating your Maine LLC tax obligations doesn’t have to be complicated. We’ll walk you through the essentials of pass-through taxation, explain Maine’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:

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

Maine 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
Maine Income Tax	5.8%-7.15%	April 15, 2025	Form 1040ME
Maine Corporate Income Tax	3.5%-8.93%	April 15, 2025	Form 1120ME
Federal Payroll Taxes (If Employees)	7.65% employer + 7.65% employee (FICA)	Quarterly (April 30, July 31, October 31, January 31)	Form 941
Maine Unemployment Tax (If Employees)	0.30%-6.27% (new employers: 2.41%)	Quarterly	Form ME UC-1
Federal Unemployment (FUTA)	6% on first $7,000 per employee (0.6% after credits)	January 31, 2026 (annual)	Form 940
Sales & Use Tax	5.5%	Monthly, quarterly, semi-annually, or annually based on sales volume	Form ST-7
Annual Report	$85 fee	June 1, 2025	File online

Understanding LLC Taxation Basics

How Maine LLCs Are Taxed by Default

Your Maine LLC doesn’t pay taxes itself. Instead, profits flow through to you and your members, who report them on their 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 you money.

Tax Classification Options

While pass-through taxation is the default, your Maine LLC can choose two 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 Maine 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 Internal Revenue Service (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 Forms W-2 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.

Maine State Taxes

Maine Income Tax

Maine has a personal income tax rate of 5.8%-7.15% that applies to your LLC’s profits on your personal return.

Filing requirements:

• Use Maine Form 1040ME
• Due April 15, 2025
• Applies to LLCs subject to the default tax structure

Maine Corporate Income Tax

If your LLC has elected to be taxed as a c corp, you are subject to Maine’s 3.5%-8.93% corporate income tax. The rate is determined by adjusted federal taxable income. 

Filing requirements: 

• Use Maine Form 1120ME
• Due April 15, 2025 

Sales and Use Tax

If your Maine LLC sells physical products or certain services:

• Collect 5.5% sales tax on taxable sales
• Register for a seller’s permit through Maine Department of Revenue
• File and pay collected taxes monthly, quarterly, semi-annually, or annually based on sales volume
• Use Maine Form ST-7

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

• Do you sell physical products in Maine? → Yes, collect tax
• Do you sell digital products? → Yes, collect tax 
• Do you provide services? → Many services are taxable (see exceptions below)
• Do you sell online to Maine customers? → Yes, collect tax

Services typically exempt from sales tax include:

• Professional services (legal, accounting)
• Educational services 
• Medical services

Products typically subject to sales tax include:

• Tangible personal property
• Prepared food
• Digital products

Payroll Taxes 

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

Unemployment Insurance (UI) Tax 

• Register through the Maine Department of Labor’s Bureau of Unemployment Insurance
• Rate is 2.41% for new employers (0.30%-6.27% afterwards) 
• File using Maine Form ME UC-1
• Due quarterly 

Withholding Tax 

• Register through the Maine Tax Portal (MTP)
• Flat rate of 5.8% 
• Due quarterly or semiweekly

Annual Report Filing

While not a tax, your Maine LLC must file an annual report each year to remain in good standing with the Secretary of State.

• Due June 1 each year
• $85 filing fee
• Filed with the Maine Department of the Secretary of State
• $50 fee applies to late filings 

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

Local Tax Considerations

Property Taxes

If your LLC owns real property in Maine:

• Rates vary by locality
• Assessed annually by the state
• May qualify for various exemptions based on business type
• Personal property tax may apply to business equipment

Tax Calendar and Filing Tips

Key Deadlines for Maine 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)

April:

• April 15: Personal or corporate income 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 1: Maine annual report due 
• June 16: Second quarter estimated tax due 

July: 

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

September:

• 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 Maine LLCs

S Corporation Election Benefits

Converting your LLC to an S corp for tax purposes can help you save on self-employment taxes. To do this, you must:

1. File Form 2553 with the IRS
2. Pay yourself a “reasonable salary” subject to employment taxes
3. Take any 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 Maine LLC owners often overlook include:

• Home office deductions
• 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

Maine Tax Forms

• Form 1040ME: Maine Individual Income Tax Return
• Form 1120ME: Maine Corporate Income Tax Return
• Form ST-7: Maine Sales and Use Tax Return
• Form ME UC-1: Maine Unemployment Insurance Tax Return

Helpful Resources

• Maine Revenue Services
• Maine Department of Labor
• Internal Revenue Service
• Maine Department of the Secretary of State