Why Form a Limited Liability Company (LLC)?

$0 + state fee & first year free Registered Agent.

The Business Taxes Payable by Your Ohio LLC

Business taxes are a fact of life, and your OH LLC will need to pay a variety of taxes to both the federal and Ohio governments. We’ll cover all the main taxes in Ohio including self-employment, payroll, federal, Ohio state tax and Ohio sales tax.

If you want help with your taxes, Incfile provides a complete Business Tax Filing service.

How Your Ohio LLC Will Be Taxed

The profits of an Ohio LLC are not taxed at the business level like those of C Corporations. Instead, taxes for an Ohio LLC work as follows:

  • 1

    Ohio LLC owners pay self-employment tax on business profits

  • 2

    Ohio LLC owners pay OH state tax on any profits, less state allowances or deductions

  • 3

    All LLC owners pay federal income tax on any profits less federal allowances or deductions

  • 4

    Some OH LLCs pay Ohio sales tax on products

  • 5

    Employers pay payroll tax on any salaries they pay to employees

  • 6

    Employees pay federal, state and payroll tax on their earnings

Items 1, 2 and 3 are taxed as “pass-through” income for any LLC owners, managers or members who receive profits from the business. Any profits are reported on federal and Ohio personal tax returns, and that’s where you will pay those taxes.

Ohio Taxes Payable to the OH Department of Taxation

There are two main types of tax that you will pay to the Ohio Department of Taxation: Ohio state income tax and Ohio state sales tax.

Ohio State Income Tax Payable on LLC Earnings

As an Ohio business owner, you will need to pay state tax on any money you pay to yourself. These earnings flow through to your personal tax return, which is where you will pay income tax. You will be taxed at the standard rates for Ohio state taxes, and you will also get to apply regular allowances and deductions.

Any salaried employees will also need to pay personal state taxes.

The Ohio state tax rates vary between 1.98 percent and 5 percent.

Get Details on the Ohio State Tax

Ohio Sales Taxes on LLC Sales

If you sell physical products or certain types of services, you may need to collect sales tax (also known as sales and use tax) and then pay it to the OH Department of Taxation. Ohio sales tax is collected at the point of purchase. Ohio sales tax rates do vary depending on the region, county or city where you are located.

You will typically need to collect Ohio sales tax on:

  • Tangible, personal property and goods that you sell like furniture, cars, electronics, appliances, books, raw materials, etc.
  • Certain services that your Ohio business might provide

Most states do not levy sales tax on goods that are considered necessities, like food, medications, clothing or gas.

Get Details on the Ohio Sales Tax Online

Federal Taxes for Your Ohio LLC: Self-Employment and Income Taxes

There are a couple different federal taxes that every LLC will need to pay, including Ohio LLCs. These are self-employment tax and federal income tax, which are taxed as “pass-through” income via your tax return forms.

Ohio LLC Federal Self-Employment Tax

All Ohio LLC business members or managers who take profits out of the LLC will need to pay self-employment tax. This tax is also known as FICA, Social Security or Medicare tax. It applies to all the earnings you withdraw from your Ohio business. The current self-employment tax rate is 15.3 percent.

You will be able to deduct your business expenses from your income when working out how much self-employment tax you owe. Here are some examples of how much self-employment tax you may need to pay, depending on your earnings:

  • On profits of $40,000, you would pay self-employment tax of $6,120
  • On profits of $70,000, you would pay self-employment tax of $10,710
  • On profits of $100,000, you would pay self-employment tax of $15,300
  • On profits of $140,000, you would pay self-employment tax of $21,420

Pay Less Self-Employment Tax by Treating Your Ohio LLC As an S Corporation

The Internal Revenue Service allows LLCs to ask to be treated as an S Corporation for tax purposes. This can help you reduce the amount of self-employment tax that you pay by declaring some of your income as salary and other income as distributions or withdrawals.

You can do this by making an “S Corporation Tax Election” with the IRS using a form known as Form 2553. We can file your Form 2553 with the IRS on your behalf.

Incfile Form 2553 S Corporation Tax Election for an LLC Service

Speak to your accountant for more information on reducing your Ohio LLC self-employment tax through an S Corporation tax election.

Ohio LLC Federal Income Tax

You must also pay regular federal income tax on any earnings you take out of your Ohio LLC. The amount of income tax you pay depends on your earnings, current income tax brackets, deductions and how you file.

You only pay federal income tax on your LLC profits that you take out of the business, less certain deductions and allowances. This includes your tax-free amount, plus LLC business expenses and other deductions for areas such as healthcare and some retirement plans. Speak to your accountant for more information.

Employee and Employer Taxes for Your Ohio LLC

If you pay employees, there are some slightly different tax implications. Speak to your accountant to get clear guidance for your own unique situation.

FAQs on Ohio LLC Business Taxes

Launch
Your Business with Incfile

No contracts. No surprises.

Only $0 + state fee to launch your business.

Start Now

Fees and Requirements in

$0

State fee

0

State filing time

0

Expected filling time

Filing Time and Price

The state charges this amount to file a new business entity. This fee goes directly to the Secretary of State.

Compare State Filing Times
Compare State Filing Prices

Compliance Requirements

This report is mandatory and must be filed within the specified time frame in order for the entity to remain in good standing with the state. Failure to file this report can lead to the company being revoked or administratively dissolved.

Other State Requirements
loading

See How Easy It Can Be to Get Your Business Incorporated

Silver

$0

One time payment

Get the Silver Package
  • Package fee
    $0
  • State fee
    $0
The Silver services includes:
  • Prepare & Filing the Articles of Organization
  • Unlimited Name Searches
  • FREE Registered Agent for a year!
Most popular

Gold

Everything from silver+

$149

One time payment

Get the Gold Package
  • Package fee
    $149
  • State fee
    $0
The Silver package, and:
  • EIN Business Tax Number
  • IRS Form 2553
  • Operating Agreement
  • Banking Resolution
  • Lifetime Company Alerts
  • Online Access Dashboard
  • Unlimited Phone & Email Support
  • Business Banking Account
  • Business Tax Consultation
Best value

Platinum

Everything from Silver & gold+

$299

One time payment

Get the Platinum Package
  • Package fee
    $299
  • State fee
    $0
The gold package, and:
  • Business Contract Templates
  • Expedited Filing
  • Domain Name + Business Email

How We Compare

Get more for less.

Incfile
LegalZoom
ZenBusiness

Initial Filing Price

$0 + State Fee

$79 + State Fee

$49 + State Fee

Billed Annually

File Articles

Name Search

Business Dashboard with Additional Services, Content & Support

Business Tax Consultation

First Year Registered Agent

FREE

$249

Operating Agreement

$40

$99

EIN

$70

$159

Has to be purchased as a package with Operating Agreement.

$70

Business Contract Templates

$150

One-time fee or FREE with Platinum package.

$40

Monthly subscription *part of Smart Employer Package

Expedited Order

(+$50)

$350

*must purchase Express Gold package

$50

*rush order $100 + state fee

Subscribe Now to Learn More About LLC and Starting a Business