I live in New York and I’m planning to start an IT service company on my own—just me for now. I keep hearing people say, “Go with Delaware, it’s better!” but I’m not sure that actually makes sense in my case. Since I’ll be working out of NYC, I want to know:
What business structure should I choose as a solo founder?
Should I register in New York or Delaware?
And what’s the yearly tax situation? how do I not overpay?
Great questions—and super common for solo tech founders starting out!
Let’s break it down simply:
Best Entity Type for You:
Since you\’re the sole owner, the two most practical options are:
Single-Member LLC (simple, flexible, and tax-friendly)
S Corp (can help save on self-employment taxes after you\’re making decent profit—say, $60K+)
For most new IT service founders, starting as a Single-Member LLC makes sense. It keeps things lean while giving you personal liability protection.
New York vs. Delaware: What Makes More Sense?
You live and work in New York, and your clients (or at least your business activity) is tied there. So even if you register in Delaware, New York will still treat your company as “doing business” in NY.
Translation: You’ll have to pay taxes and file in both states if you choose DE.
So, in your case?
Just form the LLC in New York.
It’s cleaner, cheaper, and avoids double paperwork.
Yearly Corporate Tax Rate in NY (for LLCs):
Single-Member LLCs: Usually taxed as pass-through entities (profits go to your personal return), so you’ll pay:
Federal income tax (based on your total income bracket)
Self-employment tax (~15.3%)
NY State income tax (ranges from 4%–10.9%)
NYC unincorporated business tax (UBT) if applicable: 4% (only for certain LLCs)
How to Keep Taxes Manageable:
Elect S Corp status later (when your profits justify taking a salary + distributions)
Track all business expenses (laptop, software, Wi-Fi, advertising—you name it)
Work with a tax pro who knows solo-founder tech businesses
Don’t overpay on payroll taxes; structure your pay smartly
At Business Globalizer, we help founders like you not just start the right entity, but think ahead. From NY LLC filing to EIN to choosing S Corp when it’s time, we walk you through it all.
