Self-employed taxes and LLC costs in Alaska, 2026
Alaska taxes neither personal income nor pass-through companies, which leaves federal tax as nearly the whole bill for a freelancer.
Total tax on this income in 2026
$17,800
Put aside 21% of each payment · $4,450 per quarter
| Self-employment tax (15.3%) | $12,010 |
| Federal income tax | $5,790 |
| Alaska income tax | $0 |
| QBI deduction used | $12,579 |
| Effective rate on all income | 20.9% |
With an S corp election and a $34,000 salary, about $3,467 less tax (check it).
Computed by Radif Partners from IRS and Alaska agency documents read on October 15, 2026 · How we calculate
Alaska has no individual income tax and puts no franchise or income tax on an LLC or an S corporation, so a self-employed person there pays federal tax and nothing comparable to the state. On $75,000 of net profit, a single filer owes about $15,495 in all, of which $10,597 is self-employment tax; at $120,000 the figure is $28,462. The state costs are administrative: a business license that every business needs, the LLC's formation filing, and a biennial report due every other January with the Division of Corporations, whose current fees this page sends you to read at the source because they could not be confirmed. The S corp angle has one Alaska twist. Unemployment insurance is withheld from employees too, so the owner's own salary carries both an employer and an employee contribution. With $120,000 of profit and a $50,000 salary, the election still saves about $4,900 a year.
Alaska at a glance, 2026
| LLC filing fee | not verified |
| Biennial Report | not verified |
| Income tax | none on wages or business income |
| S corporation election | followed by the state |
| Tax on $75,000 of profit (single) | $15,495 in all, $0 to Alaska |
Most states that skip a personal income tax find the money somewhere else in the business world: a gross receipts tax, a franchise tax, a fee that climbs with revenue. Alaska does not. Its revenue rests largely on oil, so a sole proprietor, a single-member LLC and an S corporation all reach the end of the year owing the state no tax on profit at all. What changes from one structure to another is federal tax and payroll, which is why the set-aside rate below is close to the federal one.
Your set-aside rate by state
Set aside in Alaska
20%
| Per quarter | $3,297 |
| Alaska income tax | $0 |
The business license is the one recurring charge
Every business operating in Alaska needs a state business license, whatever its legal form. It costs $50 a year or $100 for two years, and expires on December 31 (Alaska business license statutes and fees). A sole proprietor aged 65 or older, or a disabled veteran, pays half, but that reduction is not open to an LLC. If you invoice clients from Anchorage or Fairbanks under your own name, the license is the whole state paperwork for the year.
LLC filings with the Division of Corporations
An LLC files Articles of Organization (Form 08-0484) and then a biennial report, due January 2 of each reporting year, with a late fee from February 2. The Division's fee page lists one amount for the articles while the regulation sets a lower one, apparently because the first biennial fee is collected at formation, and the Division's site could not be read directly. So the at-a-glance table above shows the fee as not verified, and the Division of Corporations forms and fees page is the place to confirm both amounts before you file. The LLC cost comparison sets Alaska next to the states whose fees were read.
Payroll for an S corp owner
Alaska is one of the few states where workers pay into unemployment insurance alongside their employer. In 2026 the new employer rate is 1 % for every industry, and employees contribute 0.50% of wages, both on the first $54,200 (Alaska Department of Labor, 2026 rates). An owner who elects S status and pays a salary meets both sides on that salary. The wage base is far higher than in most states, so the unemployment cost on a $50,000 salary is a few hundred dollars rather than tens.
The rest of the S corp arithmetic is federal. Self-employment tax falls away on the profit above the salary, the company runs payroll and files Form 1120-S, and the QBI deduction shrinks because the salary no longer counts as business income. With no state tax on either side, the LLC vs S corp calculator gives a cleaner comparison in Alaska than almost anywhere.
No state quarterly payments
Without a personal income tax there are no Alaska estimated payments to schedule. Federal Form 1040-ES still applies: once you expect to owe $1,000 or more for the year, the four federal installments are due, and the set-aside guide turns that into a share of each invoice. Borough and city sales taxes exist in parts of the state, but they are charged on sales, not on your profit, and sit outside this page.