Income Tax FAQs
Q. What is the Village of Loudonville Income Tax rate and what type of income is taxable? The income tax rate is 1.75%. Generally, gross income (including income which is deferred) and business net profits are taxable at the local level.
Q. What is the difference between the Loudonville Village income tax and the School District income tax that is being withheld from my wages? The Village of Loudonville income tax is a municipal income tax that is collected by the Village of Loudonville and used to provide municipal services to residents, visitors, and employees who work in Loudonville. The School District income tax is collected by the State of Ohio for the school district in which you reside. Be sure you do not use your School District income tax as a credit on your Village income tax return.
Q. If I work outside Loudonville, will I still have to pay Loudonville Village income tax? Residents working outside Loudonville pay income taxes to the community where they work. If that rate is less than 1.75%, then you would be required to pay Loudonville the difference up to 1.75%. Loudonville gives credit to residents for tax paid to another municipality up to 1.75%.
Q. Can I forward my form to the Village Income Tax Office online? No, but forms are easily downloaded from this website. The completed forms must then be mailed back with any necessary payment.
Q. I am a Loudonville resident and work in an area with no municipal tax. How often must I file with Loudonville? You must file an annual tax return by April 15th of each year. As part of your annual tax return, a Declaration of Estimated Tax may be required when your tax liability to the Village of Loudonville exceeds two hundred dollars ($200.00). The first estimate should be paid with the annual tax return. Subsequent payments are due June 15th, September 15th, and January 15th.
Q. Is it possible to amend my estimate during the year? Yes. On the reminder notices sent for the second, third and fourth quarters, you may write in above the current declaration the amended amount. Please clearly mark the form as to the amount to be amended.
Q. Is there an age limit for individuals subject to Loudonville Income Tax? Yes, all individuals under sixteen years of age are exempt from the Village of Loudonville Income tax and are eligible for a refund of municipal tax withheld. There is no upper age limit.
Q. If I lived in Loudonville for a portion of the year or turned sixteen during the year, do I still need to file? Yes, but you will only be responsible to pay taxes on income earned during the time you either lived in Loudonville or turned sixteen.
Q. I am retired. My only income is from Social Security, company pension, interest and dividends. Am I required to file a Village of Loudonville Income Tax Return? No, but you will be asked to file an Exemption Certificate to be placed on file.
Q. If an individual files late, is there a penalty? Yes. The Penalty rate is 15% of the tax due or $25, whichever is greater. Also, any person who fails to make and/or file a return when no tax is due will be subject to a late filing penalty of twenty-dollars ($25.00) per month ($150.00 max). Interest of .58% (rate for 2019) per month is charged for late payments.
Q. Can I receive assistance in preparing my Village of Loudonville Tax Return? Yes. The Income Tax Office personnel can assist you either by phone, in person, or by mail. The Income Tax office is open Monday through Friday; 8:00 A.M. to 4:00 P.M. Please call 419-994-3214 to make an appointment for assistance in completing your return. Please bring with you a copy of your Federal Income Tax Return and all W-2’s and 1099 for wages. These will help us assist you in preparing your Loudonville Income Tax Return.
Q. When can I expect my refund? The Village has 90 days from the later of the date your taxes were due or the date your completed refund request is received to review your request. If your return is complete and approved, a refund check will be mailed to you. A refund request is not considered received unless it is complete and all the required information has been provided.
Q. How do I determine where my local tax is owed? Local tax is due first to the municipality in which the income was actually earned and secondarily to your city or village of residence, based on their laws.
Q. I reside in Loudonville, my wages are my only taxable income, and my employer is withholding my Loudonville tax liability properly. Do I need to file a Loudonville tax return? Yes. The Village of Loudonville has mandatory filing for all persons, age 16 and over, who are residents, or who do business within Loudonville to file an annual income tax return. A return is required even if no tax is due.
Q. My spouse and I file separately at the federal/state levels. Do I have to file the same for municipal purposes? No, a husband and wife, in any taxable year, may elect to file separate or joint Village returns, regardless of their federal or state filing status. However, there is no advantage to filing separate at the local level.
Q. Is Village withholding tax based on employee work location or residence? Village withholding is based upon work location.Q. I’m starting a business. What do I need to do about Village taxes? You will normally have to remit two types of Village taxes: the net profits tax and the employee withholding tax, if you have employees. The first is the tax due on profits of your business, whether your business is a sole proprietorship, corporation or partnership. Incidentally, all net profits earned by S-corporations are taxed at the corporate level. As such, the individual shareholders of S-corps are not taxed. Partnerships and the limited liability companies (LLC’s) must make an election to file at this level on behalf of all partners, or each individual partner must file an annual return. Once this election is made for the partnership or LLC to file, this is irrevocable, but partners may elect to have the partnership begin filing on behalf of all partners.
Sole proprietorships file by reporting their Federal Schedule C income on the proprietor’s individual Village return, if reporting tax to more than two cities; they must complete Schedule Y – Business allocation formula. Additional information is available in the instructions for the forms.
To remit the second type of tax, the tax withheld from your employees’ wages, you will need to establish a withholding account with us. You do this by filing a Business Registration form, which is a simple questionnaire. Employers are liable for all Village withholding taxes that should have been withheld from their employee’s wages EVEN if those taxes were not, in fact, withheld. Because of this obligation, you’ll want to make sure you set-up your employer withholding account as soon as you hire employees. You can call obtain a copy of the registration form under Tax Forms at this website.
Q. How can I make sure my employer is withholding the correct local tax from my wages? Look at the gross wage figure on your paycheck stub. If you are an hourly employee, your gross wage has generally been computed by multiplying your hourly rate (or an overtime rate if applicable) by the number of hours you worked during the period. Gross wages for a salaried employee are generally determined by dividing gross annual salary by the number of pay periods in the salary year. Whether hourly or salaried, gross wages are determined before any deductions or deferments (i.e., 401K deferrals). If you earned your wages in Loudonville, multiply your gross wage figure by 1.75%. The result of this computation should equal the local Village tax that was withheld from your wages. If you find that the correct local tax is not being withheld, you need to contact your employer to have it corrected. Although your employer is legally responsible for withholding the correct tax and paying the tax to the Village in which your wages were earned, the tax is being imposed upon your wages such that you have responsibility to ensure that your full tax obligation is being paid. DO NOT CONFUSE VILLAGE TAX WITH SCHOOL DISTRICT TAX.
Q. I’m self-employed but my business has not shown a profit. Am I required to file a return? Yes, anyone conducting a business in Loudonville must file an annual return and report the net profits or net losses of said business. The leasing of real or tangible property (i.e., income from rental property) that you own is considered a taxable business activity that must be reported.
Q. I owe Village taxes but I am unable to pay my full liability at the time my return is due. Should I still file my return? Yes, you should file your return by the due date whether or not you are able to pay the amount of tax that you owe to avoid the late filing penalty. Please call 419-994-3214 to discuss payment arrangements.
Q. I’m a partner in a partnership and a Loudonville resident. Do I owe Loudonville tax on my income from the partnership? A Loudonville resident is taxed upon his/her share of all income earned by partnerships (wherever located) in which he/she is a partner. However, the credit allowed by the Village of Loudonville is given for all Village income tax that was paid to the Village or cities in which the income was earned, whether the partnership as an entity or you as an individual partner paid the tax.
Q. What are the top 10 mistakes people make in filing a tax return?
10. Improper use of School District Income Tax as a credit on the Village return.
9. Failure to file a return for the year taxpayer moves in or out.
8. Failure to advise of address changes.
7. Failure to know the difference between school district taxes and Village taxes.
6. Failure to allocate taxes paid when allocating income for move-in/move out
5. Failure to mail return.
4. Failure to use correct amount of estimated tax paid during the year.
3. Failure to attach Schedules/Forms and statements.
2. Failure to attach all W-2’s.
1. Failure to use gross compensation