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Choosing the Proper Income Tax Form

The type of income tax form your company uses will depend on how the business is organized. For assistance in determining how to organize your business, contact an attorney or the Indiana Small Business Development Center.

Sole Proprietor: The income of a sole proprietor is reported on one of the IT-40 series of forms.

General Partnership: General partnerships report their income on IT-65 and the partner reports income on the IT-40 or IT-40PNR.

Limited Liability Partnership: The income of an LLP is taxed the same as a general partnership. Complete Forms IT-65 and IT-40 or IT-40PNR.

Limited Partnership: The income is taxed in the same way as a general partnership. Complete Forms IT-65 and IT-40 or IT-40PNR.

Corporation: The corporation must file a Form IT-20.

S Corporation: The income of an S Corporation is taxed only once. The S Corporation will complete a Form IT-20S and the shareholder or employee will complete an Indiana IT-40 or IT-40PNR.

Nonprofit Corporation: To qualify properly as a nonprofit, these businesses must secure a nonprofit, or tax exempt, status from the Internal Revenue Service. A company must then obtain nonprofit or exempt status from the Indiana Department of Revenue (DOR) to be free from specific tax burdens. To obtain nonprofit status, an Application to File as a Nonprofit Organization (NP-20A) must be completed and submitted to DOR. Once nonprofit status is granted, file Form IT-20NP and/or NP-20.

Limited Liability Company: If the LLC qualifies under IRS guidelines, it may be taxed only once. Like a partnership at the employee or member level, LLCs do not face the same restrictions as an S Corporation. One of the following forms would need to be filed in Indiana: IT-40, IT-40PNR or IT-65.

Contact DOR or call 317-232-0129 for assistance.

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