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STATE RANKING #6

Quick facts: 

-Indiana has a State Tax Credit for contributions to 529 plans, up to $1,000

-Indiana has a homestead property tax exemption

3.23%

State Income Tax

State
Income
Tax

5.25%

Cost of Setting Up A Business

state
business
tax

AVERAGE

Property
Taxes

7.00%

Sales
Tax (average)

State Income Taxes in Indiana

The state of Indiana does have individual income tax. Unlike most states with income tax, it is calculated as a flat percentage of 3.23% of the Federal adjusted gross margin (AGI) for 2020 (this does not include additional local income taxes that may be imposed by cities in Indiana).

State Business Taxes in Indiana

The state of Indiana has a flat Corporate Tax rate of 5.25% as of July 1st 2020. For other business entities that are flow-thru entities, such as S Corporations, Partnerships, LLCs, etc., they are taxed the individual income tax rate of 3.23%

Sales Taxes in Indiana

Unlike many other states Indiana has a single sales tax rate, at the state level. The state rate is 7.00%

Property Taxes in Indiana

The average property tax rate for residential property in the state of Indiana is 0.87%, making it a very preferable place to own property. Additionally, they have a homestead property tax exemption (similar to Texas and Idaho). It is the lessor of $45,000 or 60% of your property value.

Unemployment taxes in Indiana

Unemployment taxes usually consist of three factors. They are the wage base, range of rates, number of schedules. Below is an outline of the three:

  • Wage Base – Indiana has a wage base of $9,500 for 2020
  • UI Rates – range from 0.50% to 7.40%
  • Schedules – Indiana has multiple rate schedules regarding UI

Indiana Business Entities - LLCs

Indiana is one of the more inexpensive places to open an LLC in the country. Here are some important facts:

  • Indiana LLC fee is bi-annual (paid once every two years) at only $30 
  • When you register with the state, you pay a one time fee of $95
  • Secretary of State of Indiana website – click here
  • If you would like help setting up your LLC, we recommend using IncFile.com. They are simple and easy to use.

State #5

State #7

Romeo Razi, CPA

I’ve been an IRS Revenue Agent and Tax Examiner in the Individual, Business, and Employment Tax Divisions. I know how to legally optimize not just how much money you get to keep, but your overall business and tax strategies and structurings.

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