Illinois Taxes

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Illinois LLC
Tax Registration & Requirements

Quick Start Guide
This Quick Start Guide is a brief overview of how to form an LLC in Illinois.

Detailed Lessons:

 

Illinois LLC Costs:
Illinois LLC filing fee: $150
Illinois LLC annual report: $75

Need to save time?
Hire a professional to form your LLC in Illinois:
Northwest ($39 + state fee) or LegalZoom ($149 + state fee)

(check out Northwest vs LegalZoom)

Note: Illinois LLC fees have been reduced. If you see higher state fees on another website, that information is outdated. For details on the new fees, please see: Illinois LLC filing fees reduced

Note: Our tax lesson is not as step-by-step as our LLC formation lessons, due to the uniqueness and variation among businesses. Taxes are usually not as straightforward as forming an LLC, and therefore, the information below is an overview, and not a comprehensive guide.

You will likely need to hire a local tax professional to make sure you meet all your Illinois tax obligations. We recommend using Thumbtack.

Do it yourself in Illinois

Register with IL Department of Revenue and get Tax ID Number
http://www.revenue.state.il.us/businesses/register.htm

Personal Property Replacement Tax
Illinois LLCs are required to pay 1.5% of their net income to the IL Dept. of Revenue.
https://www2.illinois.gov/rev/localgovernments/Pages/replacement.aspx

Sales and Use Taxes
If your Illinois LLC sells goods, you are required to collect and pay sales tax. You can register with the IL Dept. of Revenue as mentioned above. You’ll need to submit sales tax returns on a periodic basis to the state.

Have employees?
If you have employees, you need to:
– withhold federal, state, and payroll taxes from your employees’ wages
– get a Federal Tax ID Number for your LLC
register with the Department of Employment and withhold payroll taxes.
– get unemployment insurance
– obey Illinois labor laws for workers’ compensation, temporary disability insurance, prepaid health care, and wage and hour programs.

Other Taxes

Depending on your industry, where your business is located, how you are taxed by the IRS, and whether or not you have employees, will determine which additional taxes and forms are due.

Some examples of other taxes and forms due are:

  • Use tax
  • Individual income tax
  • Income withholding tax
  • Partnership and LLC tax
  • Transient tax
  • Accommodations tax
  • Rental motor vehicle tax
  • Tour tax
  • Vehicle tax
  • Car sharing tax
  • Vehicle surcharge tax
  • Cigarette and tobacco tax
  • Liquor tax
  • Fuel tax
  • Local taxes
  • And more

You can find more information from the Illinois Department of Revenue.

Our Recommendation

Calculating your tax obligations in Illinois can be complicated and if done improperly can negatively impact your LLC.

We recommend that you get help from a tax professional once your LLC is formed. You can use Thumbtack or Yelp.

Hiring a tax professional will not only help you keep your Illinois LLC in compliance, but it will also give you an advisor to go to for other business questions.

You’ll want someone who’s a good fit for your company, makes you feel comfortable, and is willing to answer all of your questions. It should be someone you like personally as well as professionally. We recommend talking with at least 2-3 people before making your final decision.

Matt Horwitz
Founder & Educator, LLC University®
Forming an LLC shouldn't be so complicated. Our step-by-step guide will make the process a breeze – and no complex legal jargon! LLC University® teaches people how to form an LLC for free in all 50 states. We hope you find our free guides and resources helpful in your business journey.
Disclaimer: Nothing on this page shall be interpreted as legal or tax advice. Rules and regulations vary by location. They also change over time and are specific to your situation. Furthermore, this comment section is provided so people can share their thoughts and experience. Please consult a licensed professional if you have legal or tax questions.

8 Comments

  1. duncan January 31, 2018

    Matt,
    Thank you so much for your extensive write up about setting up a LLC it really made my life much easier. If i ever see you out I will for sure buy you a beer.

    cheers

    reply
    • Matt Horwitz February 3, 2018

      Duncan, thanks for the awesome comment! I appreciate you! A beer sounds great :)

      reply
  2. Tom February 20, 2018

    Thank you Matt for sharing great information, can you show us more clearly about Sales and Use Taxes?
    Such as how to apply for a retail sale tax id or how to get a Certificate of Resale.

    Cheers,

    reply
    • Matt Horwitz February 21, 2018

      Hi Tom, thanks for your suggestion, but this isn’t our area of expertise at this time. LLC filings in all 50 states is keeping us plenty busy. Reseller certificate and sales tax is so much more complicated (from a teaching perspective) since there are close to 10,000 tax jurisdictions in the US. I recommend getting in touch with an accountant. Thanks for your understanding.

      reply
  3. Kaninia Smith March 7, 2018

    Thank you so much for the step by step guide! You’re the best! Made it so simple for me!!1

    reply
    • Matt Horwitz March 10, 2018

      You’re super welcome Kaninia! Thanks for the lovely comment :)

      reply
  4. Tuan Nguyen December 27, 2018

    Thank you so much for a lot of great information about LLC. Can you please also post some information like how to close LLC… ?

    Thanks

    reply
    • Matt Horwitz January 6, 2019

      Hi Tuan, you’re very welcome. We have an existing body of work that we must update and maintain, so we won’t be writing about LLC dissolution for a bit. Thank you for your understanding.

      reply

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