Self-employed taxes and LLC costs in Vermont, 2026
In Vermont the line that matters is between a one-owner LLC, which owes no entity tax, and every other business form, which owes at least $250 a year.
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 |
| Vermont 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 $3,541 less tax (check it).
Computed by Radif Partners from IRS and Vermont agency documents read on October 15, 2026 · How we calculate
A Vermont LLC costs $155 to organize and $45 for each annual report, so a single-member LLC spends $380 on state fees over five years. That figure stays low only while the LLC has one owner and no election: multi-member LLCs and S corporations owe Vermont's minimum business entity tax of $250 every year on Form BI-471, while a disregarded single-member LLC does not file that form. Vermont taxes individual income in graduated brackets that it indexes each year, and the 2026 schedule had not been published when this page was checked; the calculator therefore leaves Vermont income tax out until it is. Federal tax is complete: a single filer with $75,000 of profit owes about $15,495 in federal income tax and self-employment tax. Vermont follows the S election, and on federal numbers alone it saves about $5,312 at $120,000 of profit, before the $250 minimum tax that the S corporation then owes.
Vermont at a glance, 2026
| LLC filing fee | $155 |
| Annual Report (domestic LLC) | $45 a year |
| Income tax | see the state revenue department |
| S corporation election | followed by the state |
| Tax on $75,000 of profit (single) | $15,495 federal; Vermont tax not verified |
Adding a partner, or electing S status, costs a Vermont business a fixed $250 a year. The BI-471 instructions apply the minimum business entity tax to partnerships, multi-member LLCs and S corporations, and state that a single-member LLC reported on the owner's Schedule C is not required to file. For a freelancer that makes the one-owner LLC the cheapest structure with liability protection, at $45 a year in Secretary of State fees.
Filing the annual report
The report is due within three months after the end of the LLC's fiscal year (March 31 for a calendar-year LLC). The fee is set by statute, 11 V.S.A. § 4012, at $45 for a domestic LLC and $170 for a foreign one. A business formed in another state and registered in Vermont therefore pays almost four times as much each year, one reason Vermont residents rarely gain anything by organizing elsewhere. There is no newspaper publication and no franchise tax.
Where the 2026 income tax stands
Vermont's brackets and its standard deduction and personal exemption are adjusted for inflation every year, and the amounts for 2026 appear in the return instructions released early in 2027. Until then only the 2025 schedule is official, in the IN-111 instructions. Those instructions also contain a rule that few states have: above a certain adjusted gross income, Vermont tax is the greater of the schedule result and a percentage of AGI, a floor for high earners. We do not apply 2025 numbers to 2026, so the calculator shows Vermont at zero for now and the state comparison flags it.
Estimated payments
The 2026 Form IN-114 requires estimates when you expect to owe more than $500 after withholding, and accepts 100% of last year's tax or 90% of this year's as the target. The four due dates follow the federal ones, from April 15, 2026 to January 15, 2027. The safe harbor guide explains the federal version of the same rule.
Pass-through entities and nonresident owners
An S corporation or a partnership with an owner who lives outside Vermont has an extra duty: it pays estimated tax on that owner's share, on Form WH-435, as the IN-114 notes. A Vermont couple running a consulting firm together as an LLC will meet the $250 tax but not that one. The instructions read for this page did not show an elective pass-through entity tax of the kind New York or Massachusetts offer.