Learn about the annual report and tax filing obligations for Indiana limited liability companies.
If you want to form and operate an Indiana limited liability corporation (LLC), you must prepare and submit a number of paperwork with the state. This article discusses the most significant continuing reporting and state tax filing obligations for Indiana limited liability companies.
The state of Indiana requires you to submit a biannual report for your limited liability company. You may submit the report online at the SOS website or via mail using a form (State Form 48725). The report is required every other year in the month of your LLC’s anniversary. If your LLC was created on July 15 of an odd-numbered year, for example, your report would be due in July of each succeeding odd-numbered year. The current filing costs are $30 for postal filings and $22.44 for internet submissions (including a $2.44 credit card charge).
Most LLCs are pass-through tax corporations when it comes to income taxes. In other words, the burden for paying federal income taxes is passed via the LLC to the individual LLC members. LLCs do not pay income taxes by default; only its members do. Some states charge LLCs a separate tax or fee for the privilege of conducting business in their jurisdiction. Indiana, on the other hand, is not one of those states.
However, in certain situations, the owners of an LLC elect to have their firm taxed as if it were a corporation. This decision is made by submitting IRS Form 2553 to the IRS. (The form is available on the IRS website.) When an LLC elects to be taxed as a corporation rather than as a pass-through entity, the firm must submit a separate tax return. Indiana, like practically every other state, taxes corporate revenue. In the future years, Indiana’s corporate income tax rate will be gradually reduced. The rate is 7% of adjusted gross income till July 2015. The rate then drops to 6.25% from July 1, 2015 to June 30, 2016, and then drops even more. The tax is due to the Department of Revenue in the state (DOR). To pay the tax, use the state’s company income tax return (Form IT-20). Check out the DOR website for further information.
Do you have workers in your LLC? If this is the case, you must pay employer taxes. Some of these taxes are paid to the federal government (the IRS) and are not addressed in this section. (However, it is important to understand that federal employer tax duties begin with getting a federal employer identification number (EIN).) However, Indiana employers must additionally pay state taxes.
To begin, you must withhold and pay employee income taxes to the DOR. Begin by registering your company with the DOR, either online or in print form (Form BT-1, Business Tax Application). After registering, you must submit withholding taxes on a regular basis (for example, quarterly) using Form WH-1. Each year, you’ll also need to utilize Form WH-3 to balance your LLC’s tax withholding.
You’ll also need to register to pay state unemployment insurance (UI) taxes. The Indiana Department of Workforce Development is in charge of these taxes (DWD). These taxes may be registered for online or by utilizing State Form 2837, Report to Determine Status. Then, each quarter, utilize State Forms 251 and 54256 to record your salary and pay your unemployment insurance taxes.
If your LLC sells items to clients in Indiana, you must collect and remit sales tax. This implies you’ll have to register with the Department of Revenue for this reason and then make periodic sales tax payments for products sold. You may register either online or by mailing Form BT-1. You must include a $25 application fee with your application. After registering, you will get a Registered Retail Merchant Certificate (RRMC). Then, on a regular basis, you must file sales tax returns with the DOR. This may be done online at the INTax website. Check the DOR website for further information, including online filing requirements.
If you want to do business in states other than Indiana, your LLC may need to be registered in any or all of those states. The exact states concerned will determine if you are needed to register: each state has its own regulations for what defines conducting business and whether registration is required. For registration reasons, having a physical presence (a business location) in a state, recruiting personnel in a state, or soliciting business in a state (through telephone, print advertisements, mail, or the Internet) are sometimes considered conducting business. Obtaining a certificate of authority or comparable document is normally required for registration.