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You should incorporate an LLC in the state where you live and conduct business. There are several circumstances in which forming your LLC in another state may be advantageous. Remember that no matter where you incorporate your LLC, you must pay New York taxes. If you live in New York but form your LLC in Wyoming, you must file initial and yearly reports and pay the corresponding costs in Wyoming. There are several circumstances in which forming your LLC in another state may be advantageous, which we shall explain further below (along with other popular possibilities such as Delaware, Nevada, and Wyoming).

Delaware continues to be the most popular state for entrepreneurs forming a new limited liability company. Nevada and Wyoming have grown in popularity as pro-business states. Delaware does not tax out-of-state income, which means that if you incorporate your LLC in Delaware but conduct most of your company elsewhere, Delaware will not tax your earnings.