Self-employed taxes and LLC costs in New Mexico, 2026
In New Mexico a freelancer usually owes tax on receipts before any tax on profit, because services fall under the gross receipts tax.
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 |
| New Mexico 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 $3,706 less tax (check it).
Computed by Radif Partners from IRS and New Mexico agency documents read on October 15, 2026 · How we calculate
New Mexico is one of the few states where a self-employed person selling services generally owes a tax on revenue: the gross receipts tax, charged at a state rate plus a local rate that depends on where the business is located, on top of the state income tax on profit. For 2026, the personal income tax rate schedule could not be read on an official page today, so the calculator leaves New Mexico income tax out and shows the federal part only: $15,495 on $75,000 of profit for a single filer, or $3,874 per quarter before state tax. An LLC taxed by default owes no franchise tax, while every corporation, S corporations included, pays a flat $50 corporate franchise tax each year. At $120,000 of profit and a $50,000 salary, the S election saves about $5,271 a year at the federal level after that $50. The LLC filing fee and the annual report rule could not be confirmed today.
New Mexico at a glance, 2026
| LLC filing fee | not verified |
| None (New Mexico LLCs do not file annual reports - not verified today) | none |
| Income tax | see the state revenue department |
| S corporation election | followed by the state |
| Tax on $75,000 of profit (single) | $15,495 federal; New Mexico tax not verified |
The gross receipts tax is what makes New Mexico different. Unlike a sales tax that most states limit to goods, it generally applies to services too, and it is a tax on the seller, measured on receipts, so a web developer, photographer or consultant usually registers, reports receipts and pays it, whether or not the invoice passes it on to the client (NM TRD, GRT location codes and rate map). The rate is the state rate combined with a local rate set by the city or county where the business is located, and the Taxation and Revenue Department publishes the combined rate for each location code. This page does not quote those rates because the official schedule was only available as a map today. The calculator does not include gross receipts tax either, since it falls on revenue rather than profit.
S corp or LLC in this state
S corp saves
$5,198
| Salary used (42%) | $50,400 |
| New Mexico entity tax | $50 |
The income tax schedule still to be confirmed
New Mexico taxes business profit through the personal return, with graduated rates. The 2026 schedule could not be read today: the department's rate table loads by script, and the statute sites refused the connection, so no New Mexico rate or amount appears on this page and the calculator leaves the state income tax out (NM TRD, personal income tax overview). On $90,000 of profit, a single filer's federal bill alone is $19,316; read your state rate on the department page and add it. The state income tax comparison will show New Mexico once the figures are verified.
Corporations pay a flat franchise tax
Every domestic or foreign corporation doing business in New Mexico owes a $50 corporate franchise tax each year, and an S corporation is no exception; it reports the amount on its S corporation return (NM TRD, corporate income and franchise tax). An LLC taxed as a partnership or disregarded entity does not owe it. An LLC that elects S status files the S corporation return, so expect the $50 to follow the election and confirm it with the department. The small amount rarely changes the answer, but it is one more return to file every year.
New Mexico also lets a pass-through entity elect, year by year, to pay tax at the entity level by filing its partnership or S corporation return, and the election binds every owner (NM TRD, pass-through entity). Its rate was not read today. The LLC vs S corp page shows the federal side of the choice in more detail.
Forming an LLC
A New Mexico LLC is created by filing Articles of Organization with the Secretary of State. The filing fee could not be found on an official fee page, and the long-held view that New Mexico LLCs file no annual report could not be confirmed today, so neither appears in the calculator. Check with the Secretary of State before you file, and look at the LLC cost by state page for the states whose fees were read.