Self-employed taxes and LLC costs in Maryland, 2026
Maryland is cheap to form an LLC in and costly to keep one, and every resident pays a county income tax on top of the state rate.
Total tax on this income in 2026
$21,189
Put aside 25% of each payment · $5,297 per quarter
| Self-employment tax (15.3%) | $12,010 |
| Federal income tax | $5,790 |
| Maryland income tax | $3,389 |
| QBI deduction used | $12,579 |
| Effective rate on all income | 24.9% |
With an S corp election and a $34,000 salary, about $3,683 less tax (check it).
Computed by Radif Partners from IRS and Maryland agency documents read on October 15, 2026 · How we calculate
Maryland charges only $100 to file Articles of Organization, then $300 every year for the annual report due April 15, so an LLC costs $1,600 over five years, nearly all of it in reports. The state income tax runs from 2 % to 6.5 %, but most of a freelancer's income falls in the 4.75 % band: on $75,000 of profit, a single filer owes $2,947 in state tax and $18,442 in all with federal income tax and self-employment tax. That total leaves out the county layer. Every Maryland resident also pays a county or Baltimore City income tax on the same taxable income, between 2.25% and 3.30% for 2026, which adds roughly as much again as the state tax. Maryland follows the S election and puts no entity tax on S corporations; at $120,000 of profit the model shows $5,144 of saving.
Maryland at a glance, 2026
| LLC filing fee | $100 |
| Annual Report (with Personal Property Return) | $300 a year |
| Income tax | 2 % to 6.5 % |
| S corporation election | followed by the state |
| Tax on $75,000 of profit (single) | $18,442 in all, $2,947 to Maryland |
The $300 annual report is the figure that sets Maryland apart. The State Department of Assessments and Taxation collects it each April 15 together with the personal property return, under Corporations and Associations Article 1-203 (Md. Code, Corps. & Ass'ns 1-203). Formation costs a third of that. Over a decade the fees add up to $3,100, a sum a freelancer working alone as a sole proprietor would not pay at all.
Two income taxes on one return
A Maryland resident files one return but pays two taxes. The state brackets start at 2 % and reach 4.75 % above $3,000 of taxable income; two top brackets added in 2025 apply 6.25 % and 6.5 % above $500,000 and $1,000,000 for a single filer (Comptroller, 2026 withholding memo). The county tax is charged on the same Maryland taxable net income. For 2026 it ranges from 2.25% in Worcester County to 3.30% in Dorchester and Kent, with Montgomery, Prince George's and Baltimore City at 3.20%, and Anne Arundel and Frederick using graduated scales (Comptroller, resident booklet and local rates). The calculator at the top shows the state tax only; at a 3.20% county rate, the local tax on a mid-sized freelance profit is in the same range as the state amount.
An 8.25% pass-through entity tax
Partnerships and S corporations that elect to pay at the entity level owe 8.25% of the members' share: the top state rate of 6.50% plus 2.25% standing in for the lowest local rate (Maryland Form 510/511D 2026). The members then claim a credit. The election is aimed at owners above the federal SALT limit, and its value depends on their county. Without it, an S corporation is a plain pass-through in Maryland, and at $120,000 of profit with a $50,000 salary the comparison with a default LLC comes out $5,144 in favor of the election after $2,000 of costs. The LLC vs S corp calculator lets you change the salary.
Estimated payments cover the county tax too
Quarterly payments are required when your income is expected to produce more than $500 of tax beyond Maryland withholding, and the amount covers state and local tax together. The fourth payment can be skipped by filing and paying the full return by January 31, 2027 (Maryland resident instructions). The quarterly tax guide has the federal rules, which are separate.
Maryland income tax brackets
| Taxable income, single | Rate | Taxable income, joint | Rate |
|---|---|---|---|
| $0 to $1,000 | 2 % | $0 to $1,000 | 2 % |
| $1,000 to $2,000 | 3 % | $1,000 to $2,000 | 3 % |
| $2,000 to $3,000 | 4 % | $2,000 to $3,000 | 4 % |
| $3,000 to $100,000 | 4.75 % | $3,000 to $150,000 | 4.75 % |
| $100,000 to $125,000 | 5 % | $150,000 to $175,000 | 5 % |
| $125,000 to $150,000 | 5.25 % | $175,000 to $225,000 | 5.25 % |
| $150,000 to $250,000 | 5.5 % | $225,000 to $300,000 | 5.5 % |
| $250,000 to $500,000 | 5.75 % | $300,000 to $600,000 | 5.75 % |
| $500,000 to $1,000,000 | 6.25 % | $600,000 to $1,200,000 | 6.25 % |
| over $1,000,000 | 6.5 % | over $1,200,000 | 6.5 % |
City and county taxes on business income in Maryland
| Place | Tax | Rate | Who pays |
|---|---|---|---|
| Baltimore City | County income tax (local income tax) | 3.2% | none (same taxable net income as the state tax) |
| Allegany County | County income tax (local income tax) | 3.2% | none (same taxable net income as the state tax) |
| Anne Arundel County | County income tax (graduated) | varies | Single/MFS: 2.70% on $1-$50,000, 2.94% on $50,001-$400,000, 3.20% over $400,000. MFJ/HOH/QSS: 2.70% to $75,000, 2.94% $75,001-$480,000, 3.20% over $480,000 |
| Baltimore County | County income tax (local income tax) | 3.2% | none (same taxable net income as the state tax) |
| Calvert County | County income tax (local income tax) | 3.2% | none (same taxable net income as the state tax) |
| Caroline County | County income tax (local income tax) | 3.2% | none (same taxable net income as the state tax) |
| Carroll County | County income tax (local income tax) | 3.03% | none (same taxable net income as the state tax) |
| Cecil County | County income tax (local income tax) | 2.74% | none (same taxable net income as the state tax) |
| Charles County | County income tax (local income tax) | 3.03% | none (same taxable net income as the state tax) |
| Dorchester County | County income tax (local income tax) | 3.3% | none (same taxable net income as the state tax) |
| Garrett County | County income tax (local income tax) | 2.65% | none (same taxable net income as the state tax) |
| Frederick County | County income tax (graduated) | varies | Single/MFS: 2.25% to $25,000, 2.75% $25,001-$50,000, 2.96% $50,001-$150,000, 3.20% $150,001+. MFJ/HOH/QSS: 2.25% to $25,000, 2.75% $25,001-$100,000, 2.96% $100,001-$250,000, 3.20% $250,001+ |
| Harford County | County income tax (local income tax) | 3.06% | none (same taxable net income as the state tax) |
| Howard County | County income tax (local income tax) | 3.2% | none (same taxable net income as the state tax) |
| Kent County | County income tax (local income tax) | 3.3% | none (same taxable net income as the state tax) |
| Montgomery County | County income tax (local income tax) | 3.2% | none (same taxable net income as the state tax) |
| Prince George's County | County income tax (local income tax) | 3.2% | none (same taxable net income as the state tax) |
| Queen Anne's County | County income tax (local income tax) | 3.2% | none (same taxable net income as the state tax) |
| St. Mary's County | County income tax (local income tax) | 3.2% | none (same taxable net income as the state tax) |
| Somerset County | County income tax (local income tax) | 3.2% | none (same taxable net income as the state tax) |
| Talbot County | County income tax (local income tax) | 2.4% | none (same taxable net income as the state tax) |
| Washington County | County income tax (local income tax) | 2.95% | none (same taxable net income as the state tax) |
| Wicomico County | County income tax (local income tax) | 3.2% | none (same taxable net income as the state tax) |
| Worcester County | County income tax (local income tax) | 2.25% | none (same taxable net income as the state tax) |
| Nonresidents (statewide) | Special nonresident income tax | 2.25% | nonresidents with Maryland-source income instead of a county tax |