Idaho LLC Taxes: The Complete Filing Guide (2025)

Idaho LLC Tax Basics

Navigating your Idaho LLC tax obligations doesn’t have to be complicated. We’ll walk you through the essentials of pass-through taxation, explain Idaho’s specific requirements, and highlight strategies to stay compliant and organized. This guide covers everything from federal income taxes to city-specific requirements and filing deadlines.

Use the links below to jump directly to the section you need:

• Idaho LLC Taxes at a Glance
• Understanding LLC Taxation Basics
• Federal Tax Obligations
• Idaho State Taxes
• Local Tax Considerations
• Tax Calendar and Filing Tips
• Tax Strategies for Idaho LLCs
• Forms and Resources

Idaho LLC Taxes at a Glance

Tax Type	Rate	Filing Deadline	Forms Required
Federal Income Tax	10-37% (personal brackets)	April 15, 2025	Form 1040 + Schedule C or Schedule E/K-1
Self-Employment Tax	15.3%	April 15, 2025	Schedule SE
Idaho Income Tax	5.695%	April 15, 2025	Form 40 (forms differ for other tax structures)
Idaho Corporate Income Tax	5.695%	April 15, 2025	Form 41
Permanent Building Fund Tax	$10	April 15, 2025	Included on income returns
Federal Payroll Taxes (If Employees)	7.65% employer + 7.65% employee (FICA)	Quarterly (April 30, July 31, October 31, January 31)	Form 941
Idaho Unemployment Tax (If Employees)	1% for new employers	Quarterly	Filed online
Federal Unemployment (FUTA)	6% on first $7,000 per employee (0.6% after credits)	January 31, 2026 (annual)	Form 940
Sales & Use Tax	6%	Monthly, quarterly, semiannually, or annually based on sales volume	Form 850 (provided by the state)
Annual Report	$0 fee	Varies based on registration date	Filed online

Understanding LLC Taxation Basics

How Idaho LLCs Are Taxed By Default

Your Idaho LLC doesn’t pay taxes itself. Instead, profits flow through to you and your members, who report them on personal tax returns. This is called pass-through taxation.

Here’s how it works:

1. Your LLC earns income from business activities
2. The LLC itself files no tax return (unless you elect otherwise)
3. Profits “pass through” to members based on ownership percentage
4. Each member reports their share on their personal tax return
5. Members pay tax at their individual income tax rates

What this means for you: Unlike corporations, your business profits are only taxed once, which typically saves money.

Tax Classification Options

While pass-through taxation is the default, your Idaho LLC can choose alternative tax treatments:

Default LLC Tax Status:

• Single-member LLC: Taxed as a sole proprietorship
• Multi-member LLC: Taxed as a partnership

Optional Tax Classifications:

• S Corporation: Can reduce self-employment taxes by paying “reasonable salaries”
• C Corporation: LLC pays corporate tax on profits, members pay personal tax on distributions (creates double taxation)

Idaho Affected Business Entity Tax Option: 

• Allows LLCs that have elected to be taxed as an s corp or partnership to receive tax credits on Idaho income tax
• LLCs pay Idaho income tax at the corporate rate 
• LLCs owners must report income from their pass-through entity (PTE) rate on individual income tax returns 

Not sure which tax classification is right for your business? Schedule a free consultation with 1-800Accountant.

Federal Tax Obligations

Income Tax

As an Idaho LLC owner, you’ll report your share of business profits on your personal tax return using:

• Form 1040 + Schedule C (single-member LLCs)
• Form 1040 + Schedule E + Schedule K-1 (multi-member LLCs)

Federal income tax rates range from 10% to 37% based on your tax bracket (actual brackets will depend on inflation adjustments and any tax law changes).

Simply Put: Whatever money your business makes (after expenses) gets added to your personal tax return, just like income from a job.

Self-Employment Tax

LLC members actively involved in the business must pay self-employment tax of 15.3% (covering Social Security and Medicare) on their share of LLC profits.

Key points:

• Applies to net earnings of $400 or more
• Calculated on Schedule SE
• You can deduct 50% of the self-employment tax as an “above-the-line” deduction, which lowers your adjusted gross income

What happens if I miss this payment? The IRS charges penalties of 0.5% per month plus interest. However, first-time mistakes can often qualify for penalty abatement if you have a clean compliance history.

Employment Taxes

If your LLC has employees, you must:

• Withhold federal income tax
• Pay and withhold FICA taxes (7.65% each for employer and employee)
• Pay federal unemployment tax (FUTA)
• File quarterly employment tax returns (Form 941)
• Provide W-2 forms annually

Estimated completion time: 2-3 hours per quarter (significantly less with payroll software or professional help)

Estimated Tax Payments

Because no tax is withheld from your LLC profits, you’ll likely need to make quarterly estimated tax payments using Form 1040-ES. These payments cover both income and self-employment taxes on your share of the business income. Missing deadlines or underpaying can lead to IRS penalties, even if you pay in full later.

Working with an accountant can help ensure accurate calculations, on-time payments, and a smarter overall tax strategy.

Key deadlines:

• April 15
• June 16
• September 15
• January 15

Pro Tip: Set calendar reminders 15 days before each deadline. This gives you time to prepare without the last-minute rush that leads to mistakes.

Idaho State Taxes

Idaho Income Tax

Idaho has a flat income tax rate of 5.695% that applies to LLCs. The way you file this return depends on the tax structure your LLC has elected: 

LLCs With Default Tax Structure

• Use Idaho Form 40
• Due April 15, 2025 
• Returns must be filed by all LLC members 

LLCs Taxed as C Corporations 

• Use Idaho Form 41
• Due April 15, 2025 

LLCs Taxed as Partnerships 

• Use Idaho Form 65
• Due April 15, 2025

LLCs Taxed as S Corporations 

• Use Idaho Form 41S
• Due April 15, 2025
• Must include Federal Form 2553 with state return your first year filing

Permanent Building Fund Tax 

Idaho imposes a mandatory permanent building fund tax for individuals and businesses. 

Filing requirements: 

• Submitted on your business or personal income tax return 
• Flat $10 fee 

Sales and Use Tax

If your Idaho LLC sells physical products or certain services:

• Collect 6% sales tax on taxable sales
• Register for a seller’s permit through Idaho Department of Labor
• File and pay collected taxes monthly, quarterly, or annually based on sales volume
• Due dates vary based on filing frequency

60-Second Check: Do I Need to Collect Sales Tax?

• Do you sell physical products in Idaho? → Yes, collect tax
• Do you sell digital products? → Generally not taxable
• Do you provide services? → Most services are exempt 
• Do you sell online to Idaho customers? → Yes, collect tax

Services subject to sales tax include: 

• Labor to produce tangible goods 
• Labor to prepare and serve food
• Hotel, motel, and other lodging services

Products typically subject to sales tax include:

• Tangible personal property
• Prepared food
• Some digital products

Payroll Taxes 

If you have employees in Idaho, you will be responsible for two types of payroll taxes. You can register for both through the Idaho Business Registration System. 

Unemployment Insurance (UI) Tax 

• Rate is 1% for new employers
• Due quarterly 

Withholding Tax 

• Flat rate of 5.3% 
• Due monthly, quarterly, or annually (frequency determined by Tax Commission)
• All filers must submit Idaho Form 967 annually by January 31 

Annual Report Filing

While not a tax, your Idaho LLC must file an annual report: 

• Due by the end of your LLC’s anniversary month 
• No fee 
• Filed with the Idaho Secretary of State online or by mail
• Two-year grace period before penalties apply

Calendar Alert: Set a reminder for the month before your LLC’s registration anniversary to ensure you don’t miss this easy but required filing.

Local Tax Considerations

Local Sales and Use Taxes

Idaho allows resort cities to impose their own sales and use tax up to 3% in addition to the statewide sales tax rate. 

Filing requirements:

• Separate returns for each city where you conduct business
• Different forms for each city
• Contact your LLC’s city government to determine requirements

Property Taxes

If your LLC owns real property in Idaho:

• Rates vary by locality
• Assessed annually
• May qualify for various exemptions based on business type
• Property tax payments are due December 20, 2025

Tax Calendar and Filing Tips

Key Deadlines for Idaho LLCs

January:

• January 15: Final estimated tax payment for previous year
• January 31: Issue W-2s/1099s to employees/contractors
• January 31: Fourth quarter payroll tax payment due (state and federal)
• January 31: Idaho annual withholding report due 

April:

• April 15: State income tax returns due 
• April 15: Permanent Building Funding tax due
• April 15: Federal income and self-employment tax returns due
• April 15: First quarter estimated tax payment due 
• April 30: First quarter payroll tax payment due (state and federal)

June: 

• June 16: Second quarter estimated tax due 

July: 

• July 31: Second quarter payroll tax payment due (state and federal)

September:

• September 15: Third quarter estimated tax payment due

October:

• October 31: Third quarter payroll tax payment due (state and federal)

December: 

• December 20: Property tax payment due 

Record-Keeping Checklist

Keep these records for at least 7 years:

• Business income records (invoices, receipts)
• Expense receipts and documentation
• Bank and credit card statements
• Asset purchase and improvement records
• Vehicle mileage logs
• Home office documentation
• Payroll records
• Previous tax returns

Tax Strategies for Idaho LLCs

S Corporation Election Benefits

Converting your LLC to an S Corporation for tax purposes can save on self-employment taxes:

1. File Form 2553 with the IRS
2. Pay yourself a “reasonable salary” subject to employment taxes
3. Take remaining profits as distributions exempt from self-employment tax

Example: An LLC making $100,000 in profit pays 15.3% self-employment tax on the entire amount. As an S Corp, if $60,000 is a reasonable salary and $40,000 is taken as distributions, only the $60,000 is subject to employment taxes.

Potential Savings: In this example, you’d save about $6,120 in self-employment taxes.

Affected Business Entity Tax Election

Consider electing Idaho’s affected business entity (ABE) election if:

• You want to simplify tax compliance 
• You want to receive a credit against what your LLC owes for Idaho income tax
• Your LLC has elected to be taxed as an s corporation or partnership 

Business Expense Deductions

Common deductions Idaho LLC owners often overlook:

• Home office deduction
• Business mileage (70¢ per mile for 2025)
• Health insurance premiums
• Retirement plan contributions
• Professional development expenses
• Business meals (50% deductible)

Forms and Resources

Federal Tax Forms

• Schedule C: Profit or Loss From Business (sole proprietors)
• Form 1065: U.S. Return of Partnership Income
• Schedule K-1: Partner’s Share of Income, Deductions, Credits
• Form 1120-S: U.S. Income Tax Return for an S Corporation
• Form 2553: Election by a Small Business Corporation (S Corp)
• Form 8832: Entity Classification Election

Idaho Tax Forms

• Form 40: Idaho Individual Income Tax Return
• Form 41: Idaho Corporate Income Tax Return

Helpful Resources

• Idaho State Tax Commission
• Idaho Secretary of State
• Internal Revenue Service
• Idaho Department of Labor