Learn about the annual report and tax filing obligations for Iowa limited liability companies.
If you want to form and operate an Iowa 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 Iowa limited liability companies.
If you want to form and operate an Iowa 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 Iowa limited liability companies.
Table of Contents
Annual Report
Your LLC must submit a biannual report with the state of Iowa. You may submit the report online or download a pre-filled form from the SOS website. In odd-numbered years, the report is due by March 31. Before the report is due, you should get communication from the Secretary of State. The current filing fees are $30 for online filing and $45 for postal filing.
State Corporation Tax
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. Iowa, 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. Corporation income is taxed in Iowa, as it is in practically every other state. The corporate income tax rate in Iowa is derived using a modest series of marginal rates applied to net taxable income. The tax is due to the Department of Revenue in the state (DOR). To pay the tax, use Form IA-1120, the state’s company income tax return.
Employer Taxes in the State
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).) Employers in Iowa, on the other hand, must 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 78-005a, Iowa Business Tax Registration). After you’ve enrolled, you must submit withholding taxes on a regular basis (for example quarterly). The DOR recommends that you submit electronically, although Form 44-095 is the paper form. Each year, you must balance your LLC’s tax withholding. Again, the DOR encourages online filing, however Form 44-007 is available for paper submission. Check the DOR website for further information, including on necessary electronic filings.
You’ll also need to register to pay state unemployment insurance (UI) taxes. Iowa Workforce Development is in charge of these taxes. These taxes may be registered for online at the MyIowaUI website. (There is no paper registration.) Then, each quarter, go back online to record your salary and pay your unemployment insurance taxes. Visit the Workforce Development website for further information, including on online filings.
Taxes on Sales and Use
If your LLC sells items to consumers in Iowa, 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 sign up online or by mailing Form 78-005a. After you register, you will get a sales tax permit. Then, on a regular basis, you must file sales tax returns with the DOR. This must be done online using Iowa’s eFile & Pay website. Check the DOR website for further information, including online filing requirements.
Other States Registration
If you want to do business in states other than Iowa, 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.