Virginia LLC Taxes: The Complete Filing Guide (2025)

Virginia LLC Tax Basics

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

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

Virginia 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
Virginia Individual Income Tax	2% – 5.75%	May 1, 2025	Form 760
Virginia Pass-Through Entity Tax	5.75%	April 15, 2025	Form 502PTET
Virginia Corporate Tax (C corps only)	6%	April 15, 2025	Form 500
Federal Payroll Taxes (If Employees)	7.65% employer + 7.65% employee (FICA)	Quarterly (April 30, July 31, October 31, January 31)	Form 941
Virginia Unemployment Tax (If Employees)	0.1 % to 6.2 % (new employers: 2.5 %)	Quarterly	Filed online
Federal Unemployment (FUTA)	6% on first $7,000 per employee (0.6% after credits)	January 31, 2026 (annual)	Form 940
Sales & Use Tax	5.3%-7%	Monthly or Quarterly	Form ST-1
Annual Registration Fee	$50 fee	Last day of the LLC’s anniversary month	Filed online

Understanding LLC Taxation Basics

How Virginia LLCs Are Taxed By Default

Your Virginia 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 Virginia 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)

Virginia Pass-Through Entity Tax 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 forward automatically)

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

Federal Tax Obligations

Income Tax

As a Virginia 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.

Virginia State Taxes

Virginia Income Tax

Virginia has a graduated income tax ranging from 2% to 5.75% that applies to your LLC’s profits on your personal return.

Filing requirements:

• Use Virginia Form 760
• Due May 1, 2025
• Virginia follows federal adjusted gross income as a starting point

Bottom Line: For every $1,000 your LLC earns, you’ll need to pay between $20 and $57.50 in Virginia state income tax (in addition to federal taxes).

Virginia Pass-Through Entity Tax 

This optional tax can benefit many Virginia LLC owners:

• Tax rate: 5.75% (same as top personal 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 annually by filing Form 502PTET online
• Due April 15, 2025

Real Savings Example: For an LLC with $200,000 in profits, the Pass-Through Entity Tax could save owners up to $9,000 in federal taxes by working around the SALT deduction cap.

Corporate Income Tax

If your LLC has elected to be taxed as a C corp, you must pay the state’s 6% corporate income tax. 

Filing requirements: 

• File using Virginia Form 500 
• Due April 15, 2025 

Sales and Use Tax 

If your Virginia LLC sells physical products or certain services:

• Collect 5.3% to 7% sales tax (depending on location)
• Register for a sales tax account with the Virginia Department of Taxation
• File and pay collected taxes monthly or quarterly 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 Virginia? → If yes, collect tax
• Do you sell digital products? → Generally not taxable
• Do you provide services? → Most services are exempt 
• Do you sell online to Virginia customers? → If yes, collect tax

Services typically exempt from sales tax include:

• Professional services (legal, accounting)
• Personal services (haircuts, fitness training)
• Medical services

Products typically subject to sales tax include:

• Tangible personal property
• Prepared food
• Some digital products

Payroll Taxes 

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

Unemployment Insurance (UI) Tax 

• Register through the Virginia Employment Commission 
• Rate is 2.5% for new employers (0.1% to 6.2% afterwards)
• Due quarterly

Withholding Tax 

• Register through the Virginia Department of Taxation
• Rates range from 2% to 5.75%, based on employee income
• Due monthly, semi-weekly, or quarterly (frequency determined by the total withholding amount)

Annual Registration Filing

While not a tax, your Virginia LLC must pay an annual registration fee in order to remain in good standing with the state.

• Due by the last day of your LLC’s anniversary month
• $50 fee (for LLCs)
• File online with the Virginia State Corporation Commission 
• $25 penalty applies if the fee isn’t paid on time

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

Local Tax Considerations

Local Option Sales Taxes

Virginia allows cities and counties to add local sales taxes on top of the state’s base rate.

Localities with higher rates include:

• Williamsburg (7%)
• Halifax County (6,3%)
• Hampton Roads (6%)
• Williamsburg (7%) 
• James City County (7%)
• Most other areas (5.3%)

Filing requirements:

• You do not need to register with any local government
• The Virginia Department of Taxation administers all local surtaxes
• Local rates are included in your state sales tax filings

Property Taxes

If your LLC owns real property in Virginia:

• 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 Virginia 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: Federal income tax return due 
• April 15: Self-employment tax due 
• April 15: First quarter estimated tax payment due
• April 15: Virginia pass-through entity tax due 
• April 15: Virginia corporate income tax due 
• April 30: First quarter payroll tax payment due (state and federal)

May: 

• May 1: Virginia individual income tax return due 

June: 

• 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
• September 30: Flow-Through Entity Tax election deadline (for calendar year taxpayers)

October:

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

Record-Keeping Checklist

Keep these records for at least seven 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 Virginia 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

You may want to elect Virginia’s Pass-Through Entity Tax if:

• You’re affected by the $10,000 SALT deduction cap
• You expect your LLC to earn significant taxable income this year
• All members agree to the election

Business Expense Deductions

Common deductions Virginia 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

Virginia Tax Forms

• Form 760: Virginia Personal Income Tax Return
• Form 502PTET: Virginia Pass-Through Entity Tax Return
• Form ST-1: Virginia Sales and Use Tax Return

Helpful Resources

• Virginia Department of Taxation
• Virginia State Corporation Commission 
• Internal Revenue Service
• Virginia Tax Online Services for Businesses