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Learn Everything You Need To Know About Taxes For Your Idaho LLC

If you are thinking about launching and running an Idaho limited liability company (LLC), you’ll need to make and file multiple state documents. This guide includes the most vital current reporting and state tax filing requirements for LLCs in Idaho.

Annual Report

It’s a requirement for LLCs in Idaho to file an annual report. Before the due date of the report, the Secretary of State will send a reminder notice to your LLC. You can use the SOS website to file your annual report. There’s no fee needed for you to file your annual report.

 

Idaho LLC Taxes

State Business Tax

With regard to income taxes, the majority of LLCs are supposed pass-through tax entities. To put it differently, the liability to pay federal income taxes goes through the LLC itself and lands on the individual LLC members. By default, LLCs aren’t required to pay federal income taxes, it’s their members that are liable.

A separate state tax is imposed directly on Idaho LLCs. The guidelines for the tax are complex. There are special rules that are applicable if one or more of your LLC members aren’t residents of Idaho or some part of the LLC income isn’t disseminated to members. At the very least, with the standard tax classification (partnership), and have members that are part-year Idaho residents are required to file Form ID-K1, Form 65, and Form PTE-12. There’s usually a $10 minimum tax on the LLC. Any income not allocated to members is subject to getting taxed at the corporation tax rate. Make sure to check with the Idaho State Tax Commission for more additional tax guidance.

There are incidences where the LLC members may opt to have their practice treated as a corporation for tax reasons. This is done by filing IRS Form 2559. (Visit the IRS site to get the form.) Unlike the standard pass-through tax scenario, when the LLC chooses to be taxed like a corporation, the business itself is required to file a separate tax return. Just like any other state, the State of Idaho taxes corporation income. Generally, the corporation income in the State of Idaho is taxed at a fixed rate of 7.4% plus an additional $10. But there are other options for calculating the corporation income tax. There’s also the lowest amount taxed. The corporation income tax is paid to the STC. Consider using the corporation income tax return of the state (Form 41).

State Employer Taxes

If your LLC has employees, you’ll be required to pay employer taxes. A portion of these taxes are payable to the federal government (the IRS) and aren’t included here. (But remember the federal employer tax responsibilities begin with getting a federal employer identification number (EIN).) Still, if you’re an employer in Idaho, you’ll be required to pay state taxes.

Firstly, the State Tax Commission will require you to withhold and pay employee income taxes. Can start by registering your company with the STC on paper (Form IBR-1) or online. Upon registration, you’ll be required to file withholding taxed periodically (for instance yearly) using Form 910. You’ll also have to use some type of Form 967 every year to settle the tax withholding of your LLC. For additional details concerning online filings, visit the STC website.
What’s more, you’ll be required to register to pay for state unemployment insurance (UI) taxes. The Idaho Department of Labor will handle these taxes. You can make your registration for these taxes using Form IBR-1 or do it online. Then, after every quarter, use Forms TAX026 and TAX020 to report on wages and make payments on UI taxes. Check the DOL website to get additional information concerning online filings.

Sales Tax

You’ll be required to collect and pay sales taxes if your LLC is going to be selling goods to clients in Idaho. So, you’ll have to register for this objective with STC and then follow up with periodic payments on goods sold. You can make your registration either online or through the mail in Form IBR-1. After registering, a seller’s permit will be sent. Then on an occasional basis (for example quarterly or monthly), the STC will require you to submit sales tax returns. You can do this online via Idaho’s Taxpayer Access Point (TAP) or on paper (Form 850). For additional details, visit the STC website.

Registration in Other States

If you will be conducting business outside the State of Idaho, you may be required to register your LLC in some or all states you’re doing business with. If you’ll be required to register is totally dependent on the specific states involved: every state has its own regulations for what entails conducting business and if registration is needed. Usually, activities like enlisting employees in a state, physical brick and mortar business location, or soliciting corporation in a state (like the Internet, mail, print ads, or telephone) will be deemed conducting business for registration reasons.

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