How to File LLC Taxes in Iowa?
Before you start your LLC, be sure to confirm the state's requirements. You will also need to register for any required business permits. You can do this online or by mail. Most Iowa multi-member LLCs elect to be taxed like partnerships by the IRS, which means profits pass through to owners who report them on their personal income tax returns. You may also choose to be taxed as a corporation.
If your LLC is doing business in Iowa, you’ll need to register for state taxes and pay ongoing reporting fees. The state’s business tax rate is 6%, and you’ll also need to register for sales tax (if applicable). Additionally, foreign LLCs must file a federal BOI report with FinCEN (a bureau of the US Department of Treasury) and may be subject to additional taxes and fees.
Most LLCs are taxed as pass-through entities by default. This means that profits are reported on your personal tax filings, and you’re responsible for paying self-employment taxes (Social Security and Medicare) of 15.3%. However, you can elect to be taxed as a C corporation by submitting Form 2553.
Any business that hires employees must also register for and pay workers’ compensation insurance. UI taxes are levied at the federal and state levels, and rates vary depending on the type of work your business does.
How to Form an LLC in Iowa?
When forming an LLC in Iowa, designate a registered agent. The state requires this information to be included on your Certificate of Organization. You may also need to register your business for certain state taxes, including sales and use, household hazard materials, withholding, and water service excise. In addition, you may have to obtain federal employer identification number (EIN) if your LLC is regarded as a corporation or has employees.
Most LLCs are taxed as pass-through entities, meaning profits and losses are reported on the members’ income tax filings. However, you can elect to have your LLC taxed as a C-corp by filing IRS Form 2553. This will require you to pay corporate taxes using a small series of marginal rates applied to net taxable income.
Iowa does not impose a minimum franchise or registration fee, but you may need to obtain an EIN from the IRS if your company has employees or will be subject to excise taxes. In addition, you will need to file biennial reports every two years with the state.
