Taxes and Fees for Your Ohio LLC
Here’s a breakdown of the likely taxes and fees you’ll incur when you start and run an LLC in Ohio.
Ohio LLC Formation and Filing Fee
When you first form your LLC in Ohio, you will need to pay a fee of $99 (or $199 expedited) to file your Articles of Incorporation.
Ohio Permits and Licenses
You will need to pay licensing and permit fees on a regular basis depending on the type of business you are operating and where you are located. These do vary from city to city and industry to industry. If you don’t want to do the legwork yourself, Incfile provides a complete Business License Research Package that will tell you all of the licenses and permits necessary for your new LLC. It includes:
- A comprehensive package of all the licenses, permits and tax registrations required for your business
- The application forms to file with the appropriate licensing authorities
- Your customized Business License Research Package will be emailed to you within two days of your company being filed by the state
Remember that operating your business without the required licenses can expose you to risks and fines from state and local governments.
- Ohio commercial activity tax: You will owe Ohio Commercial Activity Tax if your business takes in revenue of more than $150,00 a year
- Ohio state income tax: You will need to pay Ohio state income tax on the drawings and salary you take out of the business
- Ohio state sales/use tax: If you’re selling products or services in Ohio, you may need to pay a state sales tax
- Ohio other taxes: You may need to pay other taxes and fees, depending on the type of business you run. Learn about other Ohio business taxes.
If you’re hiring employees, you will also need to pay worker’s compensation insurance, employer withholding tax and unemployment insurance.
Because your Ohio LLC income flows through to your personal tax return, you must pay self-employment tax (also known as FICA, Social Security or Medicare tax) on your earnings. This is typically at a rate of 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. Note that if you are an LLC electing to be treated as an S Corp, you can reduce your self-employment tax.
Federal Income Tax
You will also need to pay regular federal income tax when you file your tax return every year. You can see the federal tax brackets here. Note that you will be able to apply your standard deduction, personal exemption and business expenses to this tax.
Ready to Start Your Ohio LLC?
Incfile provides a cost-effective service to help you create your Ohio LLC. We guide you through the process and handle most of the administrative steps, such as filing the Articles of Incorporation on your behalf. Our basic package also provides a free Registered Agent service for the first year.