LLC Cost in Iowa – How Much to Pay for an LLC


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Perhaps you are hoping to form an LLC in Iowa. People assume how to start an LLC is difficult and costly. However, it’s generally not difficult, and the cost would vary across states. We have all the info you need to know about the cost of forming an LLC, particularly the LLC cost in Iowa.

Iowa LLC Cost of Filing

Here are the costs involved in forming an LLC in Iowa.

Cost of Filing Formation Certificates

The Iowa Certificate of Formation is responsible for the majority of the cost, which could also vary depending on whether you’re forming a domestic LLC or a foreign LLC. Still, you can file both at the Iowa Secretary of State

Iowa Domestic LLC

  • Online Filing Fee costs $50
  • Biennial Report Fee costs $60
  • Name Reservation fee costs $10
  • By Mail: The State of Iowa does not have a standard document for Certificate of Organization to be filed by mail. You are required to create your own Certificate of Organization abiding by the specified requirements.

After creating your Certificate of Organization, you can mail the document to the following address: Lucas State Office Building, 321 E 12th St, Des Moines, IA 50319.

Visit the Official State website to learn more about Domestic LLC costs in Iowa.

Iowa Foreign LLC

  • Online Application for Certificate of Authority costs $100.00
  • By mail: Fill the Certificate of Authority form and submit the form to the following address: Secretary of State, Business Services Division, Lucas Building, 1st floor, Des Moines, IA 50319.
  • Biennial Report costs $60.00
  • Name reservation fee costs $10.00

Visit the official iowa.gov website to learn more about the costs of filing a foreign LLC in Iowa.

Note that filing online is ideal, not only because you need to go to the Secretary of State office, but also it would be faster. You won’t have to wait in a queue in doing so.

Iowa LLC Formation Service or Registered Agent Fee

You need a registered agent to form an LLC in Iowa, hence, added costs for service fees. Here are three of the best LLC services on our list that will provide you with registered agents to ease your worries.

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Business Permits and Licenses 

The business licenses depend on your business’s activity and location and are renewed yearly. As such, the cost will vary. Check the Iowa Department of Revenue Business Permit Registration

Iowa LLC Taxes to be Paid

Apart from the filing of the Annual Report, the Iowa LLCs are also subject to state tax filing obligations. Though the taxes vary from county to county.

Corporate Income tax

The Iowa Business Entities are subject to state income tax depending on the amount of income earned with certain deductions: 5.5% for $100,000 and below; 9.0% between $100,000 and $250,000;
and, 9.8% for over $250,000.

For additional information about taxes, you can visit the Iowa Department of Revenue website. You can also access the tax guide provided by the Revenue Department for assistance.

State Business Tax

Iowa imposes a corporate income tax at the maximum marginal rate of 12%, which constitutes the maximum among the States of the United States.

Iowa Withholding Tax

The withholding tax in Iowa on a nonwage income is made at the rate of 5%. Visit the Iowa Government Tax website to calculate your withholding.

Sales and Use Tax

The standard rate of sales tax is at the rate of 6% and the maximum local or county rate that applies additionally is 1.00%.

Cost comparison among States

Every state has different costs of filing for an LLC to their respective State Authorities. If you wish to gain a better understanding of the costs of opening an LLC in a different state in comparison to Iowa, read the table below:

StateFiling FeeAnnual Fee/Biennial FeeSales Tax
Iowa LLC$50$60 (Biennial)6%
Minnesota LLC$135$0 (Annual)6.87%
Illinois LLC$150$75 (Annual)6.25%
Missouri LLC$50$0 (Annual)4.225%
South Dakota LLC$150$50 (Annual)4.5%

Iowa is the source producer of standard quality agricultural and manufactured products. Iowa has established a diversified economy and welcomes significant business opportunities with a strong workforce.

Other Costs

How Much Does It Cost to Maintain an LLC in Iowa

To maintain an LLC in Iowa you will need to pay a biennial fee of $60 along with sales tax at 6%, corporate income tax, state business tax and federal taxes.

Almost 274,000 small businesses are operating in the state of Iowa. These businesses have nearly 48% of the state’s workforce. As a result, it is essential that you make sure you have the right business licenses and maintain them in order to keep your business running smoothly. Luckily, there are many ways you can get the business licenses you need at a low cost.

To begin, you’ll need to form an LLC with the Iowa Secretary of State. The process should take seven to ten business days. You’ll need to choose a business name and appoint a registered agent. The registered agent is your business’s main contact with the state. You’ll also need to choose a registered office for the LLC. This must be a physical address in Iowa. This will allow the state to send you legal mail. It’s also a good idea to choose a name that is available as a web domain. This will keep other businesses from claiming the same name.

Once you have formed your LLC, you’ll need to file for an EIN (Employee Identification Number). This number is similar to a social security number for your business. It’s used for tax reporting. If you have employees, you may also have to pay unemployment insurance taxes. These fees can vary depending on the type of business you operate. If you plan on operating a sole proprietorship, you’ll also have to pay state business taxes. You may also need to pay industry-specific licensing fees.

In addition to the EIN, you’ll also need to pay a filing fee for your certificate of formation. The Iowa Secretary of State has two ways to file for your certificate: you can upload it online or mail it in. If you choose to file by mail, you’ll typically have your certificate within one day. It’s also possible to file for your certificate by fax. The average faxing time is 1-2 days. You can also order certified copies by mail or in person. A certified copy costs $5 plus $1 per page.

Once you’ve formed your LLC, you’ll also need to file for a biennial report. The report must be filed every odd-numbered year. In Iowa, the report is due between January and April of the odd-numbered year. A biennial report is important because it keeps the state up-to-date on the business’s information. If you fail to file the report, you could lose your LLC’s status. You may also face severe penalties. The report can cost you $60.

Lastly, you’ll need to file for a registered agent. A registered agent is a business that accepts legal mail on behalf of your LLC. There are many registered agent services that can help you with this task. They’ll submit your report on your behalf, and they’ll also notify you of any filing deadlines. You can also switch to a different registered agent later on without paying any additional fees.

If you’re considering starting a business in Iowa, make sure you’ve researched the business license requirements. While you can form an LLC without paying any fees, you’ll need to pay for certain types of licenses, taxes, and other expenses. In addition, you may need to hire a professional to help you set up your business or maintain your business. The Iowa Small Business Development Center can help you through the process. The center has offices across the state and offers on-demand training and counseling.

F.A.Qs

Can I start an LLC for free?

It is possible to form an LLC without professional help, but forms still have associated costs, regardless of where your LLC is formed.

Is an LLC expensive?

It is difficult to say whether forming an LLC is expensive. Nevertheless, the cost could be anywhere from $40 to $500. If you refuse to hire professionals, you’ll still have expenses like form fees to cover.

Does an LLC need a bank account?

The need to separate personal money from business funds, thus necessitating the creation of a business bank account for your LLC.

In Conclusion

The cost of Iowa is much lower compared to other forms of business. Apart from the state filing fees and annual taxes, you might bear the cost of the registered agent. Compare the price of professional LLC services and choose the most affordable one.

1 thought on “LLC Cost in Iowa – How Much to Pay for an LLC”

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