If I live in one state and form an LLC in another, where do I pay taxes?

the short answer: it depends on what the LLC does and where it does it. If it's a one-member LLC with no Wyoming office or employees, Wyoming likely won't impose an income tax on you. But California taxes residents on all income, so you'd file there. The LLC itself might be a disregarded entity, so it flows to your 1040.

Wyoming has no state income tax, so that's not the issue. But you might still owe Wyoming annual report fees. California, though, is aggressive about taxing residents and sometimes even nonresidents with CA-source income. Forming in WY doesnt hide you from CA.

The Privacy and the tax are separate issues. WY gives you strong privacy laws and no state income tax. CA will still want its cut if you're a resident. If you're worried about public records, WY is good for that. Just don't mix up privacy with tax avoidance.

Not a lawyer or CPA but I've done this. If you operate a business in CA, you'll likely need to register as a foreign LLC there anyway, which kind of defeats the privacy purpose. And CA will tax you. If it's just a holding company with no CA activity, maybe you can avoid CA registration but you still report income on your personal return as a CA resident

What about the LLC fee? California has an annual LLC fee based on total income and it applies to LLCs doing business in CA. If you're not doing business in CA, maybe you avoid it. But if you're managing the LLC from CA, that could count.

Lol you can't escape California taxes if you live there. They'll tax the air you breathe if they could.

Assuming it's a sinlge-member LLC, it's a disregarded entity for federal taxes. You report the income on your personal return. For state, you'd pay CA tax on all income as a resident. Wyoming won't tax you on income. But you might owe WY annual report fees (~$60/year) and registered agent fees. If the LLC has any Wyoming-source income, that could be different, but likely not.

Also, if you're the only member and you're managing it from California, you probably meet the definition of doing business in California, which means you need to register with the CA Secretary of State as a foreign LLC and pay the $800 minimum franchise tax. That's a big gotcha.

Yep, CA is one of the worst for this. But if you use a WY registered agent and don't have a phy sical office in CA, you might be able to argue you're not doing business there, but it's risky. Lots of people just pay the $800 to avoid trouble.