Annual Tax Filing for Delaware LLC Owners (2026 Full Guide)

Delaware remains the absolute friendliest-American business enclave even among the most business-adjusted states of the country inviting numerous global business people to start building firms in the favorable environment of stability, transparency, and friendliness to investors.

Every year, thousands of foreign company founders choose to register their new Delaware Limited Liability Company (LLC) due to the state’s highly favorable business legal environment, relatively easy corporate laws, and low maintenance requirements. But forming the company is the starting point.

To keep the Delaware LLC in the positive legal status, you must file and pay your LLC’s annual tax and information returns and maintain compliance with US laws. If you don’t, you risk fines, forfeiting your positive legal status in the US, and even the suspension or breaking of your business entity.

With this guide, Bizstartz LLC aims to assist Delaware LLC owners, especially non-US business incorporators, in IRS compliance, annual taxes, franchise fees, and franchise tax deadlines for the 2025 tax year.

Understanding Delaware LLC Tax Structure

The LLC tax structure offered in Delaware is one of the most flexible in the world because, unlike corporations, LLCs are “pass-through entities.” This means the company itself does not pay state income tax.

The profits and losses are allocated to the members, or owners, and reported on their personal or corporate tax returns.

The benefits of this tax structure are threefold.

1. Avoidance of double taxation – Profits are taxed only once, at the member level.
   
2. Flexibility in classification – LLCs can choose to be taxed as a disregarded entity, partnership, or corporation.
3. No state income tax for out-of-state operations – If your Delaware LLC conducts business outside Delaware, you typically pay no Delaware state income tax.

That said, there are mandatory compliance obligations for all Delaware LLCs to fulfill, regardless of where they are doing business.

• Paying the Delaware Annual Franchise Tax, and
• Filing federal tax returns with the IRS.

Let’s examine the requirements in detail.

Delaware Annual Franchise Tax

What Is It?

This is a statutory obligation maintenance fee imposed by the Delaware Division of Corporations on every active LLC in Delaware. It is a flat-rate fee of $300 and is not dependent on income or the size of the business. payment is just to keep your business legally active on state records.

Payment Details

• Amount: $300 (fixed for all LLCs)
• Due Date: every June 1st.
• Payable To: Delaware Division of Corporations (division of corporations)
• Filing Method: Online payment (division of corporations website)

Delaware LLCs unlike corporations do not need to file an annual report. LLCs only have to pay the annual franchise tax.

Consequences of Missing the Deadline

For payments not made by June 1st there is:

• An Automatic penalty of $200, and
• 1.5% of the unpaid amount every month.

Your business will also be flagged as “Not in Good Standing” by the state. This will:

• Restrict you from getting a Certificate of Good Standing,
• Complicate bank account verification, payment processor approval, and
• Trigger administrative dissolution after a few years of being unresolved.

As advised by Bizstartz:

Make sure to pay your Delaware franchise tax early or allow Bizstartz to manage your annual compliance, and we’ll ensure you never miss your franchise tax deadline!

Filing Requirements for Taxes (IRS Compliance)

Every Delaware LLC has tax responsibilities on a federal level. This is true for LLCs that are wholly owned by non-U.S. residents. Basically, you will have to file some tax documents with the IRS on the LLC business structure and the taxation of the LLC.

To the extent possible, we will discuss.

A. Single-Member LLC (a disregarded entity owned by a foreign individual or foreign company)

If your Delaware LLC is owned by a single member and does not have a U.S. trade or business, you will still file:

• Form 5472 (information return of a 25% foreign-owned U.S. corporation), and
• a pro forma Form 1120 (U.S. corporation income tax return),

These are used to report transactions that your LLC has with its foreign owner, including fuels, payments, and loans.

Due Date: April 15 each year (you can extend it to October 15).

Penalty: Failure to file Form 5472 results in a penalty of $25,000, even if your LLC has no revenue.

If your LLC does business in the U.S., you’ll probably need Form 1040-NR (if you are an individual) or Form 1120-F (if you are a foreign corporation) to report U.S.-sourced income.

B. Multi-Member LLC (Partnership Tax Classification)

If your Delaware LLC has 2 or more members, the IRS automatically considers it a partnership unless you state otherwise. In such a case:

• You are to submit Form 1065 (U.S. Partnership Return), and
• You are to give each member a Schedule K-1 that summarizes the member’s portion of the company’s income, deductions, and credits, as well as any taxes paid.

Even if your LLC has no income, you must file it every year to avoid compliance problems.

Due Date: March 15 (or September 15 if an extension is requested).

If the LLC has foreign partners, it must also deal with withholding taxes using Forms 8804 and 8805 for payments that are passed out to them.

C. LLC Electing to be Taxed as a Corporation

LLCs particularly the ones that are seeking to invest venture capital, or profit reinvestment, often elect to be taxed as a C-Corporation.

Here, the LLC submits:

• Form 1120 (U.S. Corporation Income Tax Return) and
• It pays a 21% corporate income tax on net taxable income, which is a flat rate corporate income tax.

This structure may work better for businesses that are scaling up, are planning to raise capital, or for businesses that want to keep profits within the business.

Other Important Federal Filings

Besides income tax, owners of Delaware LLCs will also need to submit:

a. BOI Report (Beneficial Ownership Information)

Every U.S. LLC must, starting 2024 submit a Beneficial Ownership Information Report to FinCEN. This falls under the Corporate Transparency Act (CTA).

This report shows who the actual owners and controllers of the business are.

• When is it due? Within 90 days of starting the LLC, or for pre-existing LLCs, by January 1, 2025.
• What is the penalty for not filing? Up to $500 for every day the report is late.

b. FBAR (Foreign Bank Account Report)

Your Delaware LLC must file FinCEN Form 114 (FBAR) by April 15 if during the year it holds foreign bank accounts and the total of those accounts is over $10,000.

c. Form 1040-NR

Non-U.S. members that receive income from a U.S. source must file Form 1040-NR declaring the income that they earned through the LLC.

Delaware State Income Tax Considerations

A primary advantage to forming an LLC in Delaware, is that if your business does not operate in Delaware, you won’t have to pay any state income tax.

Nonetheless, if your business meets any of the following conditions:

• Has employees in Delaware,
• Has business facilities in Delaware or
• Has customers located in Delaware,

Your business may be responsible for Delaware:

• State Income Tax and
• Delaware Gross Receipts Tax (on total sales revenue your business earns).

Most foreign LLCs that conduct business outside the U.S, or operate over the Internet, do not have to worry about paying taxes, and for that reason, Delaware is seen as a cost effective and economically favorable jurisdiction.

Compliance and Good Standing

Access to U.S. banking, merchant accounts, and investors’ trust depends on the good standing of your Delaware LLC. Good standing of your LLC is also a requirement for maintaining your business’s ongoing operational status.

Here is a checklist that will help you remain compliant:

• You must pay the annual franchise tax of $300 before June 1.
• You must file IRS returns (Form 5472, 1065, or 1120).
• If applicable, file your BOI Report.
• Keep your Registered Agent service to the LLC, and have the service for every LLC.
• If inactive, renew your EIN, and if ownership of the business changes, inform the IRS of business changes.
• Keep all records of income and expenses.
• File your annual tax returns even if you earned zero income as this will keep your LLC active and penalty free.

Consequences of Non-Compliance

• In the event of late filing, the penalties can build to $25,000 for each IRS form.
• Delaware can take away your company’s good standing status.
• Your company’s accounts can be suspended or rejected during bank KYC updates.
• Delaware Division of Corporations can administratively dissolve your company.

Maintaining international trust and operational status for your company is a benefit of proactive compliance.

How Bizstartz Aids You in Filing and Keeping Your Delaware LLC Compliant

For the majority of people not living in the U.S., U.S. taxes and compliance rules are very complicated and confusing. This is the gap that Bizstartz addresses.

We take care of everything, from the formation of your Delaware LLC to maintenance, and take the stress of compliance off your shoulders every year.

Our professionals take care of the:

🏛️ LLC Formation in Delaware and other U.S. states

🧾 Annual Franchise Tax Payment

📄 Federal Tax Filing (Forms 5472, 1065, 1120)

🔐 FinCEN BOI Report Submission

💼 Registered Agent Services

💰 Bookkeeping & Accounting Services

🪪 EIN & ITIN Application Services

It doesn’t matter if your LLC is active or if you are just setting it up, Bizstartz guarantees that your compliance filings are accurate, timely, and stress-free.

Delaware LLC Annual Filing Checklist (Summary Table)

Conclusion: Stay Compliant, Stay Protected

Delaware is the number one choice for entrepreneurs across the globe because of its privacy, efficient taxation and compliance world-class corporate laws.

This is only possible if your company stays compliant with the required annual filings and payments. Maintaining your registered agent, paying your $300 Franchise Tax, and filing your federal returns are essential steps to keep your LLC in good standing.

Non-U.S. founders often underestimate the importance of these filings—until it’s too late. This is where working with a compliance expert such as Bizstartz can save you significant fines and protect the ongoing U.S. reputation of your business.

📩 Ready to File Your Delaware LLC Annual Tax?

Let Bizstartz take care of your Delaware LLC Annual Tax Filing from beginning to end.

We will make sure that the filings you need to submit to the Delaware Division of Corporations, the IRS, and FinCEN are done timely and done correctly.

✅ Easy.

✅ Economical.

✅ Full Assurance of Compliance.

👉 Reach out to Bizstartz today so that your Delaware LLC can stay compliant and will maintain active status for 2025 and the years to follow.