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Tax Filing for an LLC
You won't see a federal tax form that has Limited Liability Company printed on it. The IRS does not issue such a tax form.
This is because the IRS does not recognize a limited liability company as a business classification for federal tax purposes.
The business classifications that ARE recognized by the IRS for federal tax purposes and the tax forms that apply to each include:
- Sole proprietors
- Schedule C, or Schedule F
- Partnerships
- Form 1065
- Members file Schedule E
- C-corporations
- Form 1120 (for regular C-corporations)
- Form 1120S (for S-corporations)
- S-corporation shareholders file Schedule E
1) Single-Person LLC - Taxed as a Sole Proprietorship:
- Schedule C, or F:
- Filed annually.
- Attached to Form 1040.
- Schedule SE, Self-Employment Tax.
- File if you had self-employment earnings of $400 or more.
2) Two or more members - LLC Taxed as a Partnership:
- Form 1065, U.S. Partnership Return of Income
- Filed annually.
- Schedule E
- Filed annually by each members to report his/her their share LLC net income or loss.
- Attach to Form 1040.
- Schedule K-1
- Includes each member's share of LLC income, losses, deductions, and credits.
- Sent to members annually and shows their share of these items.
- Schedule K-1 indicates the appropriate tax form to be used by the member to report each item (e.g., capital gains, Schedule D, Charitable contributions, Schedule A, Etc.).
- Schedule K-1 is not filed with the IRS, it is kept by the member for his/her records.
- Schedule SE, Self-Employment Tax.
- File if you had self-employment earnings of $400 or more.
- Special rule for members who are the equivalent of limited partners:
- They pay self-employment tax only if the LLC pays them for services.
- Form 1120:
- This form is filed if the LLC is a regular C-corporation.
- No items of income, loss, deductions or credits flow through to shareholders.
- Form 1120:S
- This form is filed if the LLC is an S-corporation.
- All items of income flow through to shareholders.
- All shareholder get Schedule K-1 from S-corporation annually.
- See Schedule K-1 above, under Multiple-member LLCs. Same information applies here.
3) If Election Made to be Taxed as a Corporation:
- Form 1120
- Filed annually.
Next:
Limited Liability Company: Comparison of LLC and S-corporation
Related Links
- Your Limited Liability Company: An Operating Manual
- What is a Limited Liability Company?
- Legal Implications of Operating as a Limited Liability Company
- Reasons for LLC Popularity
- Classification of LLCs
- Making a Business Classification Election
- Tax Identification Numbers for an LLC
- LLC versus S-corporation
- Sole Proprietorships
- Partnerships
- Corporations
- S-corporations
Copyright © 2008-2012 Larry Villano. All rights reserved.