Montana LLC Taxes: The Complete Filing Guide (2025)

Montana LLC Tax Basics

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

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

Montana 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
Montana Income Tax	4.7% – 5.9%	April 15, 2025	Form 2
Montana Corporate Income Tax	6.75%	May 15, 2025	Form CIT
Montana Pass-Through Entity Tax (PTET)	5.9%	March 15, 2025	Form PTE
Federal Payroll Taxes (If Employees)	7.65% employer + 7.65% employee (FICA)	Quarterly (April 30, July 31, October 31, January 31)	Form 941
Montana Unemployment Tax (If Employees)	0%-6.12% (1%-2% new employers)	Quarterly	Filed online
Federal Unemployment (FUTA)	6% on first $7,000 per employee (0.6% after credits)	January 31, 2026 (annual)	Form 940
Local Option Sales Tax	Up to 4% (Resort Tax)	Monthly or quarterly (varies by locality)	Varies by city (Whitefish, West Yellowstone, etc.)
Annual Report	$20 fee (waived for 2025)	April 15, 2025	MT SOS portal

Understanding LLC Taxation Basics

How Montana LLCs Are Taxed By Default

Your Montana 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 Montana 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)

Montana Pass-Through Entity Tax (PTET) Option:

• Optional tax that allows LLCs taxed as partnerships or S Corps to pay tax at the entity level
• Can help overcome the $10,000 SALT deduction limitation
• Must be elected each year (does not carry over from year to year)

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

Federal Tax Obligations

Income Tax

As a Montana 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.

Montana State Taxes

Montana Income Tax

Montana’s individual income tax rate ranges from 4.7% to 5.9% and applies to your LLC’s profits on your personal return. 

Filing requirements:

• Use Montana Form 2
• Due April 15, 2025
• Calculated using your federal return as the starting point, with adjustments specific to Montana

Bottom Line: For every $1,000 your LLC earns, expect to pay $47 to $59 in Montana state income tax (in addition to federal taxes).

Montana Pass-Through Entity Tax

This optional tax can benefit many Montana LLC owners:

• Tax rate: 5.9% (matches top individual rate)
• Paid by your LLC instead of individual members
• Members receive a tax credit on their personal returns
• Helps bypass the $10,000 SALT deduction limitation
• Must elect by filing Form PTE by March 15, 2025

Real Savings Example: For an LLC with $200,000 in profits, the Pass-Through Entity Tax could save owners up to $8,500 in federal taxes by working around the SALT deduction cap.

Montana Corporate Income Tax

If your LLC elects to be taxed as a C corporation, it will be subject to Montana’s corporate income tax.

• Tax rate: 6.75% on net income
• Filing form: Form CIT
• Due date: May 15, 2025 (or the 15th day of the 5th month after the end of your LLC’s tax year)

Payroll Taxes 

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

Unemployment Insurance (UI) Tax 

• Register through the Montana Department of Labor & Industry (DLI)
• Rate is 1%–2% for new employers (0%-6.12% afterwards) 
• Due quarterly 

Withholding Tax 

• Register through the Montana Department of Revenue
• You will need to use the Montana withholding tables to determine the applicable rate.
• Due monthly, quarterly, or annually (new filers start monthly; future frequency is based on your withholding history)

Annual Report Filing

While not a tax, your Montana LLC must file an annual report to remain in good standing with the state.

• Due April 15 each year
• $20 filing fee (waived for 2025)
• Filed online through the Montana Secretary of State’s Business Portal
• A $35 late fee applies if you miss the deadline

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

Local Tax Considerations

Local Option Sales Taxes

Montana allows certain resort communities to apply a local option sales tax — commonly known as the resort tax — on specific goods and services.

Cities with local option sales taxes include:

• Whitefish: 3% resort tax on lodging, food, alcohol, and luxury items
• Yellowstone: 4% total (3% resort tax + 1% infrastructure tax)
• Red Lodge: 4% resort tax (on gross taxable sales)
• Big Sky: 4% total (3% resort tax + 1% infrastructure tax)
• Cooke City: 3% resort tax
• Craig: 3% resort tax
• Gardiner: 4% resort tax
• St. Regis: 3% resort tax
• Wolf Creek: 3% resort tax
• Columbia Falls: 3% resort tax on luxury items and services

Filing requirements:

• Businesses must track and report resort-taxable sales separately from general revenue
• Register and file directly with the local government where the tax applies
• Forms and deadlines vary by location
• Taxes typically apply to lodging, prepared food, alcohol, and luxury retail sales

Property Taxes

If your LLC owns real property in Montana:

• Rates vary by locality
• Assessed annually
• 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 Montana LLCs

January:

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

March:

• March 15: Pass-through entity tax return due 

April:

• 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 15: Montana LLC Annual Report due
• April 30: Montana UI tax due 
• April 30: First quarter federal payroll tax payment due

May: 

• May 15: Corporate income tax return due (C corps only) 

June: 

• June 15: Second quarter estimated tax due 

July: 

• July 31: Montana UI tax due 
• July 31: Second quarter federal payroll tax payment due 

September:

• September 15: Third quarter estimated tax payment due

October:

• October 31: Montana UI tax due
• October 31: Third quarter federal payroll tax payment due

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 Montana 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.

Pass-Through Entity Tax Election

Consider electing Montana’s Pass-Through Entity Tax if:

• You’re affected by the $10,000 SALT deduction cap
• Your LLC has significant pass-through income
• All members agree to the election

Business Expense Deductions

Common deductions Montana 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

Montana Tax Forms

• Form 2: Montana Individual Income Tax Return
• Form UI-5: Montana Unemployment Tax
• Form PTE: Pass-Through Entity Tax
• Form CIT: Montana Corporate Income Tax

Helpful Resources

• Montana Department of Revenue
• Montana Secretary of State – Business Services
• Montana Department of Labor & Industry
• Internal Revenue Service
• Local Government Services Bureau