Best state to form a single member LLC?

by Travis
(Connecticut)

What state would be the best to form a single member LLC for an internet company?

Answer

If you are forming a single member LLC to be taxed as a disregarded entity (the most common choice), then the state of your residence (where you pay state taxes) is best.

Forming an LLC in another state will NOT save you on state income taxes, since the profits and losses of the LLC flow through onto your personal tax return.