Self-employed taxes and LLC costs in Indiana, 2026

The headline rate hides the second layer. Every one of Indiana's 92 counties charges a local income tax, and a resident pays it at the rate of the county where they lived on January 1, on the same income the state taxes, self-employment profit included. The Department of Revenue's departmental notice lists the 2026 rates: 0.5% in Porter County at the bottom, 3.0% in Randolph County at the top, 2.02% in Marion County, 1.59% in Allen, 1.10% in Hamilton and 1.50% in Lake (Indiana DOR, county tax rates 2026). Someone who lives outside Indiana but runs a business mainly in an Indiana county owes that county's rate instead.

Indiana against its western neighbor

The state portion alone is small. $75,000 of profit produces $2,027 of Indiana tax for a single filer, where the same profit across the line in Illinois costs $3,305. Add Marion County's 2.02% and the gap narrows, which is why the comparison above should be read as state tax only; the calculator at the top of this page also leaves county tax out, since the rate depends on your county. The exemption is the only allowance: Indiana has no standard deduction, so a single filer is taxed from the first dollar above $1,000 of AGI.

S corporations and the PTET

An S corporation in Indiana is a pass-through. Its income flows to the owners' returns and the state levies no separate entity tax on it, so the election plays out mostly at the federal level: at $120,000 of profit and a $50,000 salary, the model saves $5,235 against a default LLC once $2,000 of costs are counted. Partnerships and S corporations can also elect the pass-through entity tax, which moves the state tax onto the business and gives owners a credit (Indiana DOR Information Bulletin 72). Whether that election pays depends on the federal SALT limit and should be checked with a CPA. The S election guide covers the federal side.

Forming the LLC in 2026

Articles of Organization are filed online through INBiz, and a Business Entity Report follows every two years. The state's fee pages could not be read on October 15, 2026, so the filing fees are not shown here; the forms and current amounts are on the Indiana Secretary of State forms page. One rule did change this year: under HB 1593 and HB 1666, in force since January 1, 2026, a business run from home can keep its residential address off the public record (Secretary of State, 2026 filing changes). For the general picture of what an LLC costs across the country, see LLC cost by state.