If you live in Michigan and your annual income is greater than the threshold for filing, you must submit a Michigan tax return. Your filing status, age, and income level will all affect the filing obligation. For instance, if your income is $4,550 or more and you are under 65 years old, you must submit a return. If both spouses are under 65 and you are married filing jointly, you must submit a tax return if your total income is $9,100 or more.
Additionally, non-residents who receive income in Michigan must submit a state tax return. You might be able to avoid submitting a Michigan tax return, though, if you are a non-resident and your main source of income from Michigan is from earnings or salaries earned there.
In Michigan, limited liability companies (LLCs) are a common form of corporate entity. Although the Michigan Department of Licensing and Regulatory Affairs requires LLCs to submit an annual report, the state does not charge a special LLC tax. Along with financial data, this report also contains details about the LLC’s ownership and management structure.
Additionally, if an LLC chooses to be taxed as a corporation for federal tax purposes, the state of Michigan’s corporate income tax, which has a flat 6% rate, must be paid. When an LLC is taxed as a partnership or a sole proprietorship, Michigan does not impose a corporate income tax on it; however, the LLC’s owners are still required to declare their portion of the LLC’s income on their individual income tax returns. S Corporations.
A pass-through organization known as a S corporation enables business owners to prevent double taxation on their income. S corporations are exempt from the corporate income tax in Michigan. S corporation owners must instead disclose their portion of the business’s income on their personal income tax filings. Exemption Allowance:
On their state income tax filings, taxpayers may deduct the Michigan exemption allowance. The amount of income liable to state income tax is decreased by the exemption allowance. The exemption allowed for single filers in 2021 is $4,800, and for married couples filing jointly, it is $9,600.
LLCs in Michigan are exempt from yearly registration renewal requirements. Instead, each year Michigan LLCs are required to submit a report to the Department of Licensing and Regulatory Affairs. The annual report, which includes details about the LLC’s ownership and management structure as well as its financial data, is due by February 15 of each year. Penalties and the loss of the LLC’s good standing with the state are possible outcomes of failing to file the annual report.
In conclusion, you might need to submit a Michigan tax return if you live in the state or make money there. LLCs that have chosen to be treated as corporations for federal tax reasons are required to file an annual report and may also be liable to Michigan’s corporate income tax. S companies do not pay corporate income tax to the state of Michigan, but their owners are still required to disclose their portion of the business’s income on their personal income tax forms. The amount of income that is subject to state income tax may be decreased by using the Michigan exemption allowance as a deduction.