Last Updated: July 2, 2025 by TRUiC Team


Maryland LLC Taxes: The Complete Filing Guide (2025)

Running an LLC in Maryland means dealing with taxes at federal, state, and sometimes local levels. This guide simplifies everything you need to know to stay compliant and avoid surprises, from income tax and sales tax to city-specific requirements.

Recommended: Schedule a free consultation with 1-800Accountant to stay on top of your taxes. 

Person working on their taxes.

Maryland LLC Tax Basics

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

Maryland LLC Taxes at a Glance

Tax TypeRateFiling DeadlineForms Required
Federal Income Tax10%-37% (personal brackets)April 15, 2025Form 1040 + Schedule C or Schedule E/K-1
Self-Employment Tax15.3%April 15, 2025Schedule SE
Maryland Income Tax2%-5.75%April 15, 2025Form 502
Maryland Corporate Income Tax8.25%April 15, 2025Form 500
Federal Payroll Taxes (If Employees)7.65% employer + 7.65% employee (FICA)Quarterly (April 30, July 31, October 31, January 31)Form 941
Maryland Unemployment Tax (If Employees)0.3%-7.5% (new employers: 2.6%)QuarterlyFiled online
Federal Unemployment (FUTA)6% on first $7,000 per employee (0.6% after credits)January 31, 2026 (annual)Form 940
Sales & Use Tax6%Monthly, quarterly, or annually based on sales volumeFiled online
Local Income Tax2.25%-3.2% (varies by location)April 15, 2025Form 502
Annual Report$300 feeApril 15, 2025Form 1

Understanding LLC Taxation Basics

How Maryland LLCs Are Taxed by Default

Your Maryland 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.

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Time-Saving Tip: If you’re uncertain about your LLC’s tax classification, a tax professional can review your LLC’s tax setup in 30 minutes and help you choose the most tax-efficient option.

Tax Classification Options

While pass-through taxation is the default, your Maryland LLC can choose two alternative tax treatments.

Default LLC Tax Status:

Optional Tax Classifications:

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

Federal Tax Obligations

Income Tax

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

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:

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:

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:

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.

Maryland State Taxes

Maryland Income Tax

Maryland has a personal income tax rate of 2%-5.75% that applies to your LLC’s profits on your personal return. 

Filing requirements:

Maryland Corporate Income Tax

If your LLC has elected to be taxed as a c corp, it will be subject to 8.25% corporate income tax

Filing requirements: 

Pass-Through Entity Income Tax 

If your LLC has elected to be taxed as an s corp or partnership, you are subject to a 5.75% pass-through entity income tax

Filing requirements: 

Sales and Use Tax

If your Maryland LLC sells physical products or certain services:

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

Services typically exempt from sales tax include:

Products typically subject to sales tax include:

Payroll Taxes 

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

Unemployment Insurance (UI) Tax 

Withholding Tax 

Annual Statement Filing

While not a tax, your Maryland LLC must file an annual report

Calendar Alert: Set a reminder for March 15 to ensure you don’t miss this easy but required filing.

Local Tax Considerations

Local Income Taxes

Maryland allows counties and Baltimore City to impose local income taxes, creating a significant compliance burden for many LLC owners.

Localities with income taxes include:

Filing requirements:

Property Taxes

If your LLC owns property in Maryland, you may be subject to two types of property taxes: real property tax and/or business personal property tax: 

Tax Calendar and Filing Tips

Key Deadlines for Maryland LLCs

January:

April:

May: 

June: 

July: 

September:

October:

Record-Keeping Checklist

Keep these records for at least 7 years:

Tax Strategies for Maryland 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 Maryland LLC owners often overlook include:

Forms and Resources

Federal Tax Forms

Maryland Tax Forms

Helpful Resources

Maryland LLC Taxes FAQs

Regardless of its location, an LLC is a pass-through entity by default, which means it passes any profits and losses to the members, who report them on their personal tax returns. However, an LLC can also elect to be taxed as a corporation. 

Maryland business taxes vary based on the type of business and income. LLCs taxed as C corporations pay an income tax rate of 8.25%, while LLCs taxed by default (i.e., as pass-through entities) are subject to individual income taxes. There are state and local sales taxes and other industry-specific business taxes as well. 

Typically, LLCs don’t pay taxes directly under the Internal Revenue Code; instead, profits and losses pass through to members who report them on personal tax returns. However, LLCs can choose to be taxed as corporations, altering their tax obligations.

For more information, see our LLC Taxes guide. 

An LLC in Maryland is classified as a business structure that combines the pass-through taxation of a sole proprietorship or partnership with the limited liability of a corporation. This classification allows LLC owners or members to benefit from limited personal liability while enjoying flexibility in management and tax advantages. 

Get started on how to start an LLC in Maryland with our guide. 

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Need Professional Help? While this guide covers the essentials, tax laws are complex and constantly changing. Schedule a free consultation with 1-800Accountant to ensure your Maryland LLC remains fully compliant while minimizing your tax burden.