An LLC is paperwork. That's it. It's not a tax strategy, it doesn't make you "look professional," and it doesn't grant superpowers. It does provide a liability shield between your personal assets and your business debts — which, for most freelancers and small businesses, is reason enough to bother.
This guide walks you through the actual filing in 2026, with honest pricing.
What changed in 2026
- Beneficial Ownership Information (BOI) reporting under the Corporate Transparency Act has been in effect, then partially paused, then reactivated in different forms. As of early 2026, most domestic LLCs are subject to FinCEN reporting requirements — verify status with your state and the FinCEN site before filing.
- State filing fees crept up. California still has the $800 minimum franchise tax. New filings should budget for it.
- Stripe Atlas and similar services dropped pricing. $500-ish for full Delaware C-Corp + EIN + bank — useful if you're raising money, overkill if you're freelancing.
The 5 steps to form an LLC
- Pick your state. Default to the state where you live and work.
- Pick a name. Search the state's business database to confirm availability.
- File Articles of Organization with the Secretary of State.
- Get an EIN from the IRS — free, online, takes 5 minutes.
- Draft an Operating Agreement even if you're a single-member LLC.
1. Home state filing — best for most people
If you live in Texas and run a Texas business, file in Texas. Filing in Delaware "for prestige" means you also have to register as a foreign LLC in Texas, doubling your fees and adding a registered agent requirement. The Delaware advantage is real for VC-backed C-Corps; for solo freelancers, it's pure overhead.
The trade-off: California, Massachusetts, and a few others have high annual fees. If you're in California, expect $800/year minimum. Plan around it; don't try to dodge it by filing elsewhere — the state will find you.
2. DIY through the Secretary of State — best value
Every state has an online portal. Articles of Organization, $35–$500. EIN from IRS.gov, free. Operating agreement template, free online. Total cost: filing fee plus 30–60 minutes of your time.
The trade-off: you do read the form yourself. If words like "member" and "manager" make you panic, services like ZenBusiness ($0–$200) are a calmer path.
3. Stripe Atlas — best for fundraising-track startups
If you're forming a Delaware C-Corp because investors want one, Stripe Atlas does the formation, EIN, and bank account in one flow for around $500. It's not for solopreneurs; it's for founders heading toward an institutional round.
The trade-off: C-Corps add complexity (double taxation, board, stock issuances). Don't form one unless you're actually raising.
Comparison: LLC formation costs in April 2026
| State |
Filing fee |
Annual report |
Notes |
| Kentucky |
$40 |
$15 |
Cheapest overall |
| Texas |
$300 |
$0 |
No annual report; franchise tax over $1.23M |
| New York |
$200 |
$9 biennial |
Publication requirement adds $300–$2,000 |
| California |
$70 |
$20 + $800 franchise |
Highest ongoing cost |
| Delaware |
$110 |
$300 |
Annual franchise tax flat |
| Wyoming |
$100 |
$60 |
Privacy-friendly |
| Florida |
$125 |
$138.75 |
Common for snowbirds |
Common mistakes to avoid
Forming in Wyoming or Delaware to "save on taxes." You pay tax where you do business, not where you file. Filing elsewhere adds a registered agent and foreign LLC fees.
Skipping the operating agreement. Even single-member LLCs benefit. It documents how the LLC operates and is often required to open a business bank account.
Mixing personal and business funds. A separate bank account is the simplest way to maintain the liability shield. Commingling can pierce the veil in a lawsuit.
FAQ
Do I need an LLC for my side hustle?
Not until you have meaningful liability exposure or income. Sole proprietorship is fine under $30k–$50k for low-risk services.
Does an LLC save on taxes?
By default, no. A single-member LLC is taxed as a sole proprietorship. Electing S-Corp taxation can save self-employment tax once profit exceeds ~$50k/yr.
Should I use LegalZoom?
Convenient, not necessary. Their basic package is $0 + state fee, but upsells push the typical bill to $300+. DIY through the SoS is free of upsells.
Where to go next
For related guides see Self-employed tax deductions for 2026, Best business banking in 2026, and How to set up automated invoicing for freelancers in 2026.