![]() ![]() To comply with this tax, the business will need to register online with the Department of Revenue, Business Licensing Services. ![]() Sales and Use Taxes are applicable to any business that sells products in the state of Washington, and it requires the business to collect and pay sales taxes periodically. This tax requires that each quarter, the business pays UI (Unemployment Insurance) taxes and report wages paid out. This is a simple enough tax to complete, and it can be completed online through the website of the state's Business Licensing Services or Form BLS-700-028. The business will need to register to pay taxes for state unemployment insurance through Washington's Employment Security Department. State employer tax is only applicable for Washington state LLC businesses that have employees. This holds true both for LLCs that have elected to be taxed as a pass-through and LLCs that have elected to be taxed as a corporation. Because there is no income tax, most LLCs will not owe any state tax. Washington state does not have a personal or corporate income tax, and it is one of the few states that does not. If this is elected, the federal government taxes the business as a C corporation. This may be an option for those looking to avoid pass-through taxes. If the profits went back into the business to pay expenses, the owners are still taxed on this money regardless.Īn LLC can also choose to be taxed as a corporation by filling out IRS form 8832. With any Washington LLC, profits are always taxed to the owners, whether or not the profit was actually distributed. Each owner then reports his or her share of the profits on his or her individual 1040 tax form. In this case, the profits of the business are divided among the owners per the agreement. Many LLCs that consist of multiple members decide to file as a partnership, using IRS form 1065. Just like any other self-employment business, self-employment taxes are owed on the net income of a Washington LLC. In this case, the individual simply reports business profits on his or her individual 1040 tax return. Sole proprietorships and single-member LLCs are treated the same under the tax code. The members of the LLC are not required to be listed in the Articles of Organization.Ī Washington state LLC will be taxed in several different ways: A Washington LLC can be started with one or more people. To start a Washington LLC, you must file the Washington Articles of Organization with the Washington secretary of state. If you are considering filing a Washington LLC, you will want to be aware of the taxation that will occur in your business. An LLC can be classified as a sole proprietorship, a partnership, or a corporation. The members of the LLC determine how the business will be classified for taxes on a federal level. One advantage of an LLC when it comes to tax time is flexibility. 4.The Washington state LLC tax rate is variable and depends on taxable net income. You can, however, claim dependent deductions on your Federal Tax Return. Unlike most states, Washington does not have a dependent deduction. The Federal Income Tax, however, does allow a personal exemption to be deducted from your gross income if you are responsible for supporting yourself financially. ![]() Keep in mind that not all deductions allowed on your federal income tax return are necessarily going to be allowed on your Washington income tax return. Certain itemized deductions (including property tax, qualified charitable contributions, etc) may be allowed depending on the income level and filing type of the taxpayer. Unlike many other states, Washington has no standard deduction. For details on specific deductions available in Washington, see the list of Washington income tax deductions. Using deductions is an excellent way to reduce your Washington income tax and maximize your refund, so be sure to research deductions that you mey be able to claim on your Federal and Washington tax returns. Income tax deductions are expenses that can be deducted from your gross pre-tax income. ![]()
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