LLC tax return: How does LLC tax filing work?

If you’re the owner of a Limited Liability Company (LLC) or considering setting up your small business as an LLC, understanding your tax responsibilities is key. And when it comes to tax time, you’ll want to ensure you have the proper documents ready to file. So, what business tax return does your LLC need to file? Keep reading as we outline the tax forms you’ll need depending on your LLC type to ensure you file business taxes accurately, confidently, and on time. 

How does LLC tax filing work?

A Limited Liability Company, or LLC, is a popular business designation, but taxes can get confusing. That’s because the Internal Revenue Service (IRS) doesn’t recognize LLCs for federal tax purposes. Instead, an LLC is a state designation. So, if you wonder, “Does an LLC file a tax return?” the answer is: it depends. LLCs have options when it comes to taxation. 

LLCs can choose how they want the business to be taxed. Depending on the number of members and other factors, you could elect the sole proprietorship, partnership, C Corporation (C Corp), or S Corporation (S Corp) tax classification for your LLC, each of which will have a specific tax form to file and LLC tax return deadline, which we’ll cover in more detail next.

Learn more about how LLC tax filing works and the benefits of an LLC to see which classification is best for your business. Block Advisors’ business information and tools can also help you prepare to make important decisions for your business.

Which business tax return do you need to file for your LLC?

As mentioned above, the small business tax return and complementary forms and schedules you’ll file at tax time will depend on the tax classification you choose. In summary, LLC tax returns vary based on whether you file as a sole proprietorship, partnership, C Corporation, or S Corporation.

• Sole proprietorship: By default, single-member LLCs are taxed as sole proprietorships. On tax forms, this type of LLC may be referred to as a “disregarded business entity.” LLCs taxed as a sole proprietorship will report business income and expenses on Schedule C as part of your individual tax return (Form 1040) – not a specific small business tax return. The due date is April 15.
• Partnership: Multi-member LLCs are taxed as a partnership by default. Similarly to a sole proprietorship, LLC partnership tax items pass through the entity to the members. Tax filing for a partnership is slightly more involved. To start, you’ll file IRS Form 1065 on behalf of the LLC, a small business tax return specific to partnerships. Then, you’ll have to provide each member with a Schedule K-1 showing the member’s share of the LLC’s profits and losses as shown on Form 1065. The due date for Form 1065 and Schedule K-1 is March 15. Finally, LLC members will report their share of the profits or losses on Schedule E (Part II) of their personal tax returns.
• C Corporation: If you choose to file as a C Corp, you must first file Form 8832, Entity Classification Election, with the IRS. You’ll then file Form 1120 annually. LLCs taxed as C Corporations are taxed twice (double taxation), which means the LLC pays tax on its income, and shareholders pay tax on the income when it is distributed as a dividend. (Learn more about LLCs vs C Corps). The LLC tax return deadline for C Corps is April 15.
• S Corporation: To make an S Corp election, you must first file IRS Form 2553 and then file Form 1120-S annually. S Corps avoid double taxation because, like partnerships, an S Corp’s income passes through to its owners via Schedule K-1. (Here’s more on LLCs vs S Corps). The LLC tax return deadline for LLCs taxed as S Corps is March 15.

LLC Filing as a single member or partnership

Like any business structure, LLCs will likely owe more than federal income taxes. For example, LLC members taxed as partnerships or sole proprietorships must also pay self-employment taxes using Schedule SE. Members are also generally required to make estimated tax payments once every quarter. using Form 1040-ES.

Get help with your LLC tax return

Tax filing for your Limited Liability Company doesn’t have to be a headache. If you’re feeling overwhelmed by the different LLC tax forms, don’t worry. File your LLC taxes on your own or file with a Block Advisors tax pro with 100% satisfaction guaranteed so you can get back to doing what you love.

Our taxes, bookkeeping, payroll, and incorporation services are designed with small business owners like you in mind. Speak with a certified small business pro today to get help.

This article is for informational purposes only. The content may not constitute the most up-to-date information and should not be construed as legal advice.