Flat-Fee Tax Preparation for Indiana Residents

Indiana has a flat income tax rate of 3.05% — one of the lowest flat rates in the Midwest — and the rate is scheduled to decrease further in coming years

Indiana counties impose local income taxes ranging from 0.5% to 2.9% — residents must pay both state and county income tax, and non-residents working in IN counties may owe county tax as well

Indiana conforms to federal depreciation including bonus depreciation, simplifying planning for real estate investors and business owners

IN does not impose a franchise tax on LLCs, making it low-cost for entity maintenance

Indiana's Financial Institution Tax and Utility Receipts Tax apply to certain industries — relevant for financial services businesses operating in IN

IN real estate transfer tax is minimal — no statewide transfer tax, though counties may impose small transfer fees

Indiana does not impose a state estate tax, making it favorable for wealth transfer

The IN pass-through entity tax election allows eligible entities to pay IN income tax at the entity level for potential SALT cap relief

Indiana Real Estate Tax

Indiana offers affordable real estate with strong rental yields, attracting out-of-state investors to Indianapolis, Fort Wayne, and surrounding markets. With no state transfer tax and a low flat income tax rate, IN is one of the more investor-friendly states in the Midwest. Federal depreciation conformity allows full benefit of cost segregation studies on IN investment properties.

Indiana Business Tax

Indiana's low flat income tax rate, no franchise tax for LLCs, and federal depreciation conformity make it competitive for businesses. County-level income taxes add a layer of compliance, and non-residents working in IN must track county residency for proper withholding. The IN PTET election provides SALT cap relief for pass-through business owners.

Do I need to file an Indiana state tax return?

If you are an Indiana resident or earned IN-source income above the filing threshold, you must file an IN IT-40 return. Indiana taxes residents on worldwide income at the flat 3.05% rate, plus the applicable county income tax. Non-residents with IN-source income file the IT-40PNR.

What is Indiana's county income tax?

In addition to the 3.05% state income tax, Indiana counties impose local income taxes on residents — rates range from about 0.5% to 2.9% depending on the county. If you live in Marion County (Indianapolis), you pay the Marion County rate on top of the state rate. Non-residents who work in certain IN counties may also owe county tax on wages earned there. Total IN tax rates (state + county) typically range from 3.55% to nearly 6%.

What makes Indiana taxes unique?

Indiana's low flat state rate combined with county income taxes creates a two-layer income tax system that differs from most states. The combination of low rates, no state transfer tax, no franchise tax for LLCs, and federal depreciation conformity makes Indiana one of the more business-friendly states in the Midwest.

Does Indiana have a pass-through entity tax?

Yes. Indiana offers a pass-through entity tax election allowing eligible S-corps and partnerships to pay IN income tax at the entity level. The entity deducts this payment on the federal return, providing potential SALT cap relief for owners subject to the $10,000 limitation. Given IN's low rates, the dollar benefit may be modest but is still worth evaluating.