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Indiana State Taxes

Indiana Income Taxes

Indiana is preferrable state regarding taxes. Even though it does have personal income tax, it’s one of the few states that has a flat tax, not a progressive one. Additionally, the state of Indiana has a state tax credit for contributions to 529 plans, up to $1,000, for money put away for education.

State Income Taxes in Indiana

The state of Indiana does have individual income tax. However, it is one of only 10 state which is calculated as a flat percentage of your income. The flat tax in Indiana is 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 and Property Taxes in Indiana

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

Property Taxes – 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

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