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A Quick Overview Of Wisconsin LLC Taxes
When people think of setting up an LLC, perhaps the last thing that they are considering or how they can help with taxes. In general, LLCs are not responsible as an entity for paying taxes. They are pass-through entities, directing the respondents to the owner of the limited liability company and the members. There are certain taxes that you will have to pay if you do have a limited liability company, ones that are sometimes different from what you would have to pay as a sole proprietorship or partnership. In some instances, you may regard your limited liability company more like a corporation to take advantage of certain tax benefits. Let’s look at the different aspects of Wisconsin LLC taxes.
Filing Your Annual Report
To file your annual report, you must first have set up an LLC in the state of Wisconsin. This will cost you $25, and this can be filed that the DFI website. You are also responsible for paying state business taxes.
State Business Taxes And LLCs
As mentioned earlier, LLCs are simply pass-through tax entities. Any taxes that are owed, including federal taxes and state taxes, are passed on to the individual members. Limited liability companies are never responsible or required to pay for any type of income taxes. Although a separate tax may be imposed on a limited liability company in certain states, Wisconsin is not one of those. Only in circumstances where you are regarding your LLC is a corporation, this can be done for tax purposes. To do this, you must file IRS Form 2553 which will change your limited liability company from a pass-through entity so it is taxed more like a corporation. If this occurs, you must file a separate tax return, and Wisconsin certainly does tax corporations. This amounts to 7.9% of the total net income that you earn. You must pay this to the Department of Revenue of the state.
What If You Have Employees?
If you do have employees that work for your LLC, employer taxes must be paid. Some of this will be directed at the federal government, whereas others are going to be directed at the state. It is the responsibility of the employer to withhold these taxes and to do this, you must register your business with Form BTR-101. You will also be responsible for unemployment insurance taxes. You will need to file each quarter with Forms UCT101 and UC-7823-E.
Sales And Use Taxes
If you have multitudes of customers buying your products or services in Wisconsin, collecting sales tax is mandatory. You must register with the Department of Revenue, and periodically, you must pay sales tax payments for everything that you sell. By using Form BT-101, you can submit these taxes quarterly. As you can see, when you have an LLC, there are many taxes that you will have to pay, especially if you have employees working for you.
How LLCs Are Beneficial Regarding Taxes
The primary benefit of creating an LLC is to let it remain as a pass-through entity. This makes the entire process very simple. It’s even easier when you do not have any employees, allowing you to simply pay taxes based upon your earnings and losses. All the while, your limited liability company will be protecting your personal assets. It also allows you to avoid corporate taxes at the same time. It is highly recommended that, as you are earning money, that you simply set aside 30% to 40% of everything that you earn if you hope to pay your taxes on an annual basis.
How To Set Up Your LLC
Now that you see how beneficial it is to have an LLC for your business, and you understand what taxes are going to be coming due, you may want to set up your limited liability company right away. You can do this by filing your Articles of Organization which is Form 502 and submitting this to the Department of Financial Institutions. Prior to doing this, you will need to reserve your LLCs name. Finding a registered agent is also required. If there will be many members or managers as part of your limited liability company, you must list their names and addresses, as well as the name and address of every organizer. Finally, the signature of the organizer must be on this document, as well as the name of the drafter of the articles. Also include the email address and phone number of your LLC. Once this is done, you can submit this to the Wisconsin Department of Financial Institutions. You can do this by mail for $170, or you can file online for $130 instead. In the span of a few weeks, your LLC will be created so you can benefit from its protection and tax benefits.
If you are currently thinking of creating an LLC in Wisconsin, you now know what to expect in regard to the taxes you must pay. As long as you are setting aside up to 40% of the money that you are earning, paying your taxes will be very easy to do. Consulting with an accountant may be the easiest way to ensure that you are filing the right documents. If you are ready to file your papers to start your LLC, you may want to also contact a professional business that can answer your questions and also create your limited liability company for you.