Do you need a Nevada or Delaware LLC?

The short answer is yes...if your business is located in Nevada.

Otherwise, your best bet is to form your business entity in the state where your business operates.

There are many myths about forming Nevada LLCs and corporations. One such myth is that you can avoid paying income tax by incorporating in Nevada. Repeat after me: "there is no (legal) way to avoid income tax except by earning no income".

Another myth is that you can hide your assets from your creditors (including ex-spouses and bankruptcy trustees) by forming a Nevada corporation and handing bearer shares in the corporation to an accomplice.

Needless to say, these techniques don't work. Bad things happen when you try to cheat the IRS or a bankruptcy judge.

In many cases, it's unnecessary. Most people, if they used the tax rules to their fullest, would save more money than they do already. It is not necessary to cheat to lower your tax bill.

Bottom line: form your LLC in the state where your business is located.