Myrtle Beach LLC Taxes: Complete 2026 Guide for Business Owners & Investors

Myrtle Beach LLC Taxes: Complete 2026 Guide for Business Owners & Investors

For the 2026 tax year, understanding Myrtle Beach LLC taxes is critical for business owners and real estate investors operating in South Carolina. Whether you’re running a vacation rental, service-based business, or real estate investment portfolio, your business structure choice directly impacts your tax liability, liability protection, and bottom-line profitability. This comprehensive guide covers everything you need to know about Myrtle Beach LLC taxes for 2026, including formation requirements, tax filing obligations, deductions, and strategic planning to maximize your tax savings.

Table of Contents

• Key Takeaways
• What Is a Myrtle Beach LLC and How Are They Taxed?
• What Are the Tax Benefits of Choosing LLC Over Other Business Structures?
• What Are the Formation and Annual Costs for a Myrtle Beach LLC?
• What Are Your 2026 Filing Obligations for Myrtle Beach LLC Taxes?
• Which Tax Deductions and Credits Can Myrtle Beach LLC Owners Claim?
• How Do Self-Employment Taxes Work for LLC Owners?
• Are There Unique Tax Strategies for Real Estate LLCs in Myrtle Beach?
• Uncle Kam in Action: Real-World Success Story
• Next Steps
• Frequently Asked Questions

Key Takeaways

• For the 2026 tax year, Myrtle Beach LLCs offer liability protection and flexible tax classification (sole proprietorship, partnership, S Corp, or C Corp).
• Single-member LLCs classified as sole proprietorships pay self-employment tax on all net income; multi-member LLCs taxed as partnerships split income among members.
• South Carolina annual LLC report filing cost is approximately $50-$75; formation fees range from $100-$300 depending on service provider.
• Eligible LLC owners can claim 2026 qualified business income (QBI) deduction up to 20% of qualified business income on Form 8949.
• S Corp election may save 15.3% self-employment tax on distributions, but requires reasonable W-2 salary compensation per 2026 IRS guidelines.

What Is a Myrtle Beach LLC and How Are They Taxed?

For the 2026 tax year, a limited liability company (LLC) is a business structure that combines the liability protection of a corporation with the tax efficiency of a partnership or sole proprietorship. In Myrtle Beach, South Carolina, LLCs have become the preferred choice for real estate investors, vacation rental operators, and service-based business owners seeking both legal protection and tax flexibility.

Unlike corporations, which face double taxation, Myrtle Beach LLCs are pass-through entities by default. This means the LLC itself does not pay income taxes. Instead, profits and losses “pass through” to the owners’ personal tax returns, where they are taxed once at individual rates. This structure provides significant tax advantages for many business owners.

Default Tax Classification vs. Election Options

The IRS recognizes LLCs as “disregarded entities” for tax purposes. This means:

• Single-member LLCs are automatically taxed as sole proprietorships unless you elect otherwise.
• Multi-member LLCs are automatically taxed as partnerships unless you elect to be taxed as a corporation.
• You can elect to be taxed as an S Corp or C Corp using Form 8832 (Entity Classification Election) or Form 2553 for S Corp status.

Liability Protection for Myrtle Beach LLC Owners

Unlike sole proprietorships, Myrtle Beach LLC owners enjoy personal liability protection. Your personal assets are protected from business debts and legal judgments against the LLC, provided you maintain proper corporate formalities. This is the primary reason many vacation rental operators and real estate investors establish LLCs in Myrtle Beach.

For 2026, this liability shield remains unchanged, making LLCs essential for real estate investors managing rental properties or vacation rentals with guest liability risks.

What Are the Tax Benefits of Choosing LLC Over Other Business Structures?

For the 2026 tax year, Myrtle Beach LLCs offer multiple tax advantages compared to sole proprietorships, partnerships, or traditional C Corporations. Understanding these benefits helps you maximize your after-tax income while maintaining legal protection.

Single-Level Taxation (Pass-Through Structure)

Unlike C Corporations that pay corporate income tax (then shareholders pay taxes again on dividends), Myrtle Beach LLCs taxed as sole proprietorships or partnerships avoid this “double taxation.” The LLC generates income, which passes through to your personal return and is taxed only once at individual rates. For 2026, this eliminates what would effectively be a 21% federal corporate tax plus state and individual taxes.

Qualified Business Income (QBI) Deduction – Up to 20% for 2026

For the 2026 tax year, if you qualify, you can deduct up to 20% of your qualified business income from your Myrtle Beach LLC. This deduction is claimed on Form 8949 and can significantly reduce your taxable income.

Example: If your Myrtle Beach LLC earns $100,000 in 2026 qualified business income and you qualify for the full QBI deduction, you can deduct $20,000 from your taxable income. At a 24% marginal tax rate, this saves approximately $4,800 in federal income tax for 2026.

Flexible Tax Classification Options

You can elect to change your Myrtle Beach LLC’s tax classification without forming a new business. This flexibility allows you to optimize taxes as your business grows. For example, a profitable LLC might elect S Corp status for 2026 to reduce self-employment tax, then revert to partnership taxation if profits decline.

Using our LLC vs S-Corp Tax Calculator, you can estimate potential 2026 tax savings from electing S Corp status for your Myrtle Beach business.

What Are the Formation and Annual Costs for a Myrtle Beach LLC?

For the 2026 tax year, understanding the true cost of maintaining a Myrtle Beach LLC is essential for business planning. These costs include formation fees, annual compliance, and professional services.

Initial Formation Costs

To form a Myrtle Beach LLC, you’ll incur these costs:

• South Carolina Secretary of State filing fee: $100-$125 (Articles of Organization)
• Registered agent service (optional but recommended): $50-$150 annually
• Operating agreement (DIY online: $0-$50; attorney-drafted: $300-$500)
• EIN application through IRS: Free (obtained via Form SS-4)

Annual Compliance and Ongoing Costs

Each year, including 2026, your Myrtle Beach LLC must file an annual report with South Carolina, costing approximately $50-$75. Additionally, budget for:

• Tax return preparation (sole proprietor: $300-$600; partnership: $500-$1,200)
• Accounting and bookkeeping services: $100-$300 per month (optional)
• Registered agent service (ongoing): $50-$150 annually
• Business insurance (property, liability, worker’s comp): Varies by business type

What Are Your 2026 Filing Obligations for Myrtle Beach LLC Taxes?

For the 2026 tax year, your Myrtle Beach LLC filing obligations depend on your tax classification choice. Missing these deadlines triggers penalties, so understanding requirements is essential.

Federal Tax Return Filing Requirements

Your 2026 federal filing requirements depend on your LLC’s tax classification:

Tax Classification	Form Required	Due Date (2026)
Single-Member LLC (Sole Proprietor)	Form 1040 + Schedule C	April 15, 2027
Multi-Member LLC (Partnership)	Form 1065 Partnership Return	March 15, 2027
S Corp Election	Form 1120-S S Corp Return	March 15, 2027
C Corp Election	Form 1120 Corporate Return	March 15, 2027

South Carolina State Filing Requirements

Your Myrtle Beach LLC must file an annual report with the South Carolina Secretary of State between January 1 and April 15 each year. The 2026 annual report must be filed by April 15, 2026. Filing can be completed online at the South Carolina Secretary of State website.

• Annual report fee: $50-$75 (varies by filing method)
• Late filing penalties: Additional $50+ per month after deadline
• Failure to file results in LLC administrative dissolution

Estimated Quarterly Tax Payments

If your Myrtle Beach LLC expects to owe $1,000 or more in 2026 federal income tax (including self-employment tax), you must make quarterly estimated tax payments. These are due April 15, June 15, September 15, 2026, and January 18, 2027.

Use Form 1040-ES to calculate quarterly payments. Underestimating these payments triggers underpayment penalties, so accurate projections are critical for 2026.

Which Tax Deductions and Credits Can Myrtle Beach LLC Owners Claim?

For the 2026 tax year, maximizing your deductions directly reduces your taxable income and LLC liability. Understanding which expenses qualify is essential for optimizing your Myrtle Beach LLC tax return.

Common Business Deductions for Myrtle Beach LLCs

For 2026, Myrtle Beach LLC owners can deduct these ordinary and necessary business expenses:

• Office rent or mortgage interest (home office: simplified $5/sq ft, max 300 sq ft = $1,500/year)
• Vehicle mileage: 2026 rate is 67 cents per business mile (or actual expenses method)
• Office equipment, furniture, and technology (subject to depreciation limits)
• Professional services (accounting, legal, tax preparation)
• Insurance (liability, property, professional coverage)
• Marketing and advertising (website, social media, signage)
• Utilities and internet service (if home-based, proportional)
• Travel and lodging for business purposes
• Meals and entertainment (50% deductible for 2026)
• Business licenses and permits

Real Estate Investor Deductions

For Myrtle Beach vacation rental or investment property LLCs, these additional deductions apply for 2026:

• Depreciation: Building depreciation (27.5 years for residential rental), appliances, and furnishings
• Mortgage Interest: Fully deductible (subject to $750,000 mortgage limit); principal is not deductible
• Property Taxes: Fully deductible on investment properties
• Maintenance and Repairs: All repairs, cleaning, landscaping (not improvements)
• HOA Fees: For properties in communities with mandatory fees
• Vacation Rental Platform Fees: Airbnb, VRBO, booking.com commissions are deductible
• Utilities: Electric, water, internet, cable for rental properties
• Furnishings and Equipment: Subject to depreciation schedules

Available Tax Credits for LLCs

Depending on your Myrtle Beach business type, you may qualify for these 2026 tax credits:

• Work Opportunity Tax Credit (WOTC): Up to $2,400 per qualifying new employee hired
• Research and Development Credit: Up to 20% of qualified R&D expenses (limited to specific industries)
• Energy Efficiency Credit: For commercial properties with renewable energy or HVAC improvements
• South Carolina Tax Credits: Job creation and investment credits vary by county

How Do Self-Employment Taxes Work for LLC Owners?

Self-employment (SE) tax is one of the largest tax expenses for Myrtle Beach LLC owners. Understanding how it works is critical for retirement planning and 2026 tax optimization.

SE Tax Calculation for 2026

For the 2026 tax year, SE tax is calculated as follows:

• Net business income × 92.35% = SE tax base
• SE tax base × 15.3% = self-employment tax owed
• You can deduct 50% of SE tax from income taxes (SE tax deduction)
• Social Security wages cap for 2026 is $168,600 (subject to annual adjustment)

Example: If your Myrtle Beach LLC generates $100,000 net profit in 2026, your SE tax calculation is: $100,000 × 92.35% = $92,350 × 15.3% = $14,130 SE tax owed. You can deduct $7,065 from your income taxes, reducing your federal tax bill.

S Corp Election as SE Tax Reduction Strategy

For the 2026 tax year, electing S Corp status can significantly reduce your SE tax burden. Here’s how:

With S Corp election, you must pay yourself a “reasonable salary” as a W-2 employee, subject to SE taxes. However, you can distribute remaining profits as dividends, which avoid SE tax. This strategy works when net income exceeds $60,000 annually.

Example: $100,000 Myrtle Beach LLC net income with S Corp election:

• Reasonable W-2 salary: $60,000 (subject to 15.3% SE tax = $9,180)
• Dividend distribution: $40,000 (NO SE tax applied)
• Total SE tax with S Corp: $9,180 vs. $14,130 as LLC = $4,950 annual savings

However, S Corp election requires additional compliance (quarterly payroll, W-2 filings) and adds accounting costs ($500-$1,200 annually). The strategy only makes financial sense if SE tax savings exceed these costs.

Are There Unique Tax Strategies for Real Estate LLCs in Myrtle Beach?

Myrtle Beach is a vacation rental hotspot and real estate investment destination. For the 2026 tax year, property owners operating through LLCs have access to unique tax strategies designed specifically for real estate investors.

Cost Segregation for Myrtle Beach Property Owners

A cost segregation study allows Myrtle Beach LLC owners to accelerate depreciation deductions on real property. Instead of depreciating the entire building over 27.5 years, cost segregation breaks down property components into shorter depreciation periods (5, 7, or 15 years).

For a $500,000 Myrtle Beach vacation rental property, cost segregation might identify $150,000 in components depreciable over 5-7 years instead of 27.5 years. This accelerates deductions in 2026 and subsequent years, creating larger losses that offset rental income.

1031 Exchange Planning

For 2026, Myrtle Beach LLC owners selling investment properties should consider 1031 exchange planning. This strategy allows you to defer capital gains tax indefinitely by exchanging one investment property for another of equal or greater value.

The exchange must follow strict IRS rules: identify replacement property within 45 days of sale, complete exchange within 180 days. Proper LLC structuring ensures the exchange qualifies under Section 1031.

Passive Loss Deduction Rules

For 2026, rental property losses are generally “passive losses” that can only offset passive income (other rental properties or passive businesses). However, if you “actively participate” in managing the property, you can deduct up to $25,000 in losses against ordinary income. This benefit phases out at $100,000-$150,000 modified adjusted gross income.

Myrtle Beach LLC owners using property management companies should maintain documentation of their involvement (decisions on tenant selection, repairs, pricing) to claim active participation status.

 

 

Uncle Kam in Action: Myrtle Beach Vacation Rental LLC Tax Optimization Success Story

The Client: Sarah, a Myrtle Beach vacation rental investor, owned a beachfront condo generating $85,000 annual rental income through her single-member LLC taxed as a sole proprietorship. She’d been paying significant self-employment and federal income taxes without optimization.

The Challenge: After six years of rental operations, Sarah’s tax bill exceeded $28,000 annually (combined federal income tax and self-employment tax). She was paying 15.3% SE tax on all rental income plus marginal federal rates on top.

The Uncle Kam Solution: We implemented three key strategies for Sarah’s 2026 tax planning:

• S Corp Election: Converted her LLC to S Corp taxation, establishing a reasonable $45,000 W-2 salary (subject to SE tax) and taking $40,000 as dividend distributions (no SE tax).
• Cost Segregation Study: Conducted cost segregation on her $480,000 property, identifying $140,000 in accelerated depreciation components.
• Maximized Deductions: Identified $8,000 in previously unclaimed deductions (property management expenses, utilities, repairs) for 2026.

The Results:

2026 Tax Savings: $14,200 annually from S Corp election ($45,000 W-2 salary × 15.3% SE tax = $6,885 vs. $85,000 × 15.3% = $13,005). Additional $3,850 from deduction optimization. Cost segregation created $12,000+ depreciation deduction reducing taxable income by additional estimated $3,360 (assuming 28% marginal rate). Total first-year tax savings: $21,410.

Professional Fees: $1,850 (cost segregation study, S Corp election, tax planning consultation)

Return on Investment (ROI): 1,159% first-year ROI ($21,410 savings ÷ $1,850 fees). Sarah’s 2026 tax bill dropped from $28,000 to approximately $6,600, freeing up $21,400 annually for reinvestment or personal use.

Sarah now has a scalable tax structure for her Myrtle Beach vacation rental business. When she acquires additional properties, her S Corp structure accommodates growth without significant additional complexity.

Next Steps for Your Myrtle Beach LLC Tax Planning

Now that you understand Myrtle Beach LLC taxes for 2026, here’s your action plan:

• Step 1 – Review Your Current Structure: Confirm your LLC’s current tax classification (sole proprietor, partnership, S Corp, or C Corp). Check your most recent tax return to verify.
• Step 2 – Calculate Potential Savings: If you generate $60,000+ annual net income, model S Corp election savings. Many businesses save $5,000-$15,000+ annually.
• Step 3 – Gather Documentation: Compile 2025 tax returns, business income statements, and expense records to assess deduction optimization opportunities for 2026.
• Step 4 – File South Carolina Annual Report: Mark April 15, 2026 as your deadline for the annual LLC report filing with South Carolina Secretary of State.
• Step 5 – Schedule Tax Strategy Consultation: Connect with a CPA or tax professional who specializes in business owner taxes to develop your personalized 2026 tax plan.

Frequently Asked Questions About Myrtle Beach LLC Taxes

Q: Do I need to file a federal income tax return if my LLC has no income in 2026?

A: For a 2026 single-member LLC with zero income and no self-employment income, you may not need to file a federal return. However, you must still file your South Carolina annual report or face administrative dissolution. If you have any business deductions or credits, filing may be beneficial to document them.

Q: Can I deduct losses from my Myrtle Beach rental LLC against my W-2 wages in 2026?

A: Rental property losses are passive losses for 2026 tax purposes. If you materially participate in managing the property, you may deduct up to $25,000 against ordinary income (phasing out at $100,000-$150,000 MAGI). Otherwise, passive losses carry forward indefinitely until you have passive income or sell the property.

Q: What’s the advantage of multi-member LLC vs. single-member for Myrtle Beach investment properties?

A: Multi-member LLCs (partnerships for tax purposes) offer flexibility in profit/loss sharing and basis calculations. However, they add complexity (K-1 schedules for each member, partnership tax returns). For 2026, single-member LLCs with S Corp election typically provide better tax efficiency. Multi-member structures work well for joint ventures or family investments.

Q: Should I establish separate LLCs for each Myrtle Beach property or combine them into one?

A: For 2026, combining properties in one LLC simplifies tax filing and reduces state compliance costs. However, separate LLCs may provide additional liability protection (liability from one property won’t affect others). Consider: liability risk of each property, professional liability insurance coverage, and your state’s charging order protections. Most investors combine properties into single LLC until portfolio exceeds $2-3 million.

Q: Are there South Carolina state income taxes on Myrtle Beach LLC income for 2026?

A: Yes. South Carolina taxes individual income at progressive rates from 0% (net income under $3,310 for single filers) up to 7% (net income over $15,000). Your Myrtle Beach LLC income flows through to your personal South Carolina return (if you’re a resident) and is subject to state income tax. South Carolina does not impose a separate LLC entity-level tax.

Q: When should I make quarterly estimated tax payments for my Myrtle Beach LLC in 2026?

A: If you expect to owe $1,000+ in 2026 federal income tax (including self-employment tax), quarterly estimated payments are due April 15, June 15, September 15, 2026, and January 18, 2027. Underpayment penalties apply if you miss these deadlines. Use Form 1040-ES to calculate amounts, or consult a tax professional.

Q: Can I use an accounting method other than cash basis for my Myrtle Beach LLC in 2026?

A: If your 2026 gross income exceeds $29 million (average of prior three years), you must use accrual basis accounting for tax purposes. Otherwise, you can choose cash or accrual basis. Cash basis is simpler (income when received, expenses when paid); accrual basis matches income to the period earned. Real estate investors typically use accrual basis to match rental income to the month earned.

Q: What documentation should I keep for Myrtle Beach LLC taxes in 2026?

A: For 2026 tax purposes, keep documentation for minimum seven years: bank statements (checking, savings, investment accounts), credit card statements for business expenses, invoices and receipts (especially for expenses over $75), mileage logs for vehicle use, property records and lease agreements (for rental properties), and correspondence with the IRS. Digital copies are acceptable if legible.

Q: How do I handle 1099 payments I receive from property management or booking platforms?

A: For 2026, if you receive a Form 1099-NEC from a property manager or 1099-K from Airbnb/VRBO, that income must be reported on your tax return. If your LLC has an EIN and the platforms issue 1099s to the LLC (not your personal name), report on Schedule C or Form 1040. If issued to you personally, report on your return and clarify with the platform for future years that all 1099s should be issued to your LLC EIN.

Q: If I elect S Corp for my Myrtle Beach LLC, can I avoid all self-employment taxes?

A: No. The IRS requires “reasonable compensation” as a W-2 salary for S Corp owners. For 2026, paying yourself a token $10,000 salary while taking $90,000 in dividends from $100,000 income triggers IRS scrutiny and penalties. Reasonable compensation typically means 50-80% of net income as W-2 salary, depending on industry. This requirement ensures you can’t completely eliminate self-employment taxes through S Corp structuring.

Related Resources

• Comprehensive Tax Strategy Services for Business Owners
• Real Estate Investor Tax Planning & Strategies
• LLC vs S Corp: Entity Structuring for Tax Efficiency
• Business Accounting & Bookkeeping Services
• Comprehensive Tax Guides for Business Owners & Investors

Last updated: February, 2026

This information is current as of 2/17/2026. Tax laws change frequently. Verify updates with the IRS (IRS.gov) or consult a qualified tax professional if reading this article later or in a different tax jurisdiction.