Forming a Delaware LLC with co-founders unlocks business opportunities, but understanding the tax implications is crucial. This guide breaks down federal and Delaware-specific taxes, deductions, and obligations for your co-founder LLC in 2026. Check out our guide on starting a business in Delaware for step-by-step instructions. Let Lovie's AI handle the complexities, so you can focus on building your venture.
A Delaware LLC with multiple members (co-founders) is typically taxed as a partnership by default. This means profits and losses are passed through to the members' individual income tax returns. However, you can elect to be taxed as an S-Corp or C-Corp for potentially different tax advantages. Our resource on [the Delaware LLC filing process](https://www.lovie.co/formation/resources/llc-formation/agency-delaware) breaks this down further. Careful consideration with your tax advisor is essential to determine the optimal structure for your co-founder LLC.
| State Filing Fee | $90 |
| Annual Fee | $300 |
| First Year Total | $690 |
| Processing Time | 6.3 days avg (official: 5-10 days) |
| Corporate Tax Rate | 8.7% |
Recommended Entity: C-Corp
Key Tax Benefit: R&D Tax Credit (up to $500K for startups)
Compliance Priority: IP assignment agreements, 83(b) elections
Data sources: State Secretary of State offices, IRS, Tax Foundation (2026). Platform metrics based on anonymized Lovie user data.
Business Tax Obligations Guide outlines tax obligations, deduction opportunities, and filing requirements for your entity type. Key components include tax deduction strategies, estimated tax payments, and self-employment tax calculation, each playing a critical role in the business tax guide process. Understanding Schedule C reporting and pass-through income treatment is essential, as these factors directly impact tax bracket optimization.
When evaluating business tax guide options, factors such as write-off maximization and state tax nexus determination should inform your decision-making process.
Single-member LLCs pay self-employment tax (15.3%) plus income tax on all net profits, reported on Schedule C of the owner's personal tax return.
Deduct rent paid for salon space or booth rentals.
Deduct the cost of professional supplies used in services (hair products, makeup, skincare). Depreciate or expense the cost of equipment like styling chairs, facial machines, and lighting.
Pay estimated income tax and self-employment tax to the IRS.
Pay estimated income tax to the California Franchise Tax Board (FTB). File and pay sales and use tax to the California Department of Tax and Fee Administration (CDTFA).
Start your formation with Lovie — $29 one-time, plus your state's filing fee.
State-specific formation guides, cost breakdowns, compliance checklists, and expert comparisons — updated for 2026.