How to File a Tax Return for an LLC

By David Ingram

LLCs borrow tax forms from sole proprietorships and partnerships rather than using their own specialized forms. Single-member LLCs file taxes like an individual, using Form 1040, Schedule C to calculate business income. Multi-member LLCs use the form for partnerships to calculate their tax obligations for the year. An LLC can also elect to file as a C or S corporation, using the appropriate forms. You can file all forms online, making tax time more convenient for LLC members.

LLCs borrow tax forms from sole proprietorships and partnerships rather than using their own specialized forms. Single-member LLCs file taxes like an individual, using Form 1040, Schedule C to calculate business income. Multi-member LLCs use the form for partnerships to calculate their tax obligations for the year. An LLC can also elect to file as a C or S corporation, using the appropriate forms. You can file all forms online, making tax time more convenient for LLC members.

Single-Member LLCs

Step 1

Download and print IRS Form 1040 and Schedule C (see Resources). Form 1040 is the form for individual income tax returns, and Schedule C is the form for profit or loss from individuals' business activity.

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Step 2

Complete Form 1040. Begin by specifying your filing status and claiming any exemptions for dependents. Moving on to the income section, list all of your normal income in addition to the supplemental income listed on the form. List deductible expenses in the next section, then move on to the second page to calculate your tax obligation or refund.

Step 3

Complete Schedule C. List all business income in part one, and all business expenses in part two. Follow the instructions in part three to calculate your cost of goods sold, then list additional expenses in sections four and five.

Step 4

Submit both forms at tax time. Follow the link at the end of this article to find the IRS's E-File website, where you can upload your forms and submit payment online with instant verification.

Multi-Member LLCs

Step 1

Download and print IRS Form 1065 and Schedule K-1 (see Resources). Form 1065 is for income from partnership organizations, and Schedule K-1 is for individual partners' share of partnership income.

Step 2

Complete Form 1065. This form is a bit more complicated than Form 1040, as it is specifically designed for businesses. After listing your company's information at the top of the form, complete page one by listing all normal income and deductible expenses. Use Schedule A to calculate your cost of goods sold, and address all of the questions in Schedule B. Use Schedule K to analyze individual partners' share of income and arrive at the company's net income. List all required balance sheet items in Schedule L. Use Schedule M-1 to reconcile the profit or loss on your books to the profit or loss on your tax return and use Schedule M-2 to analyze changes in the balance of the partners' capital accounts.

Step 3

Complete Schedule K-1. Fill out all of the information on page one to determine your individual tax obligation from your share of company profits.

Step 4

Submit the forms at tax time on the IRS's E-File website.

Filing as a Corporation

Step 1

Download and complete Form 1120 if you wish to classify your LLC as a C-corporation for tax purposes (see Resources). Use Form 1120 to calculate your tax obligation by adding all income and subtracting all deductible expenses for the year.

Step 2

Use Form 1120S if you wish the IRS to classify your LLC as an S-corporation at tax time.

Step 3

Submit Form 1120 or 1120S on the E-File website at tax time.

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How to Report Income as an LLC Member

References

Resources

Related articles

How an LLC Claims Profit and Losses

A limited liability company, or LLC, is a business entity type that has a history in the United States that spans decades rather than centuries. The relative newness of the format means that the Internal Revenue Service has yet to recognize the LLC as a specific tax entity type. Instead, the IRS classifies an LLC as one of the existing entity types that are defined in the tax code, based on the number of owners, known as members, and the tax elections those owners make. Single-member LLCs can elect to be taxed as a sole proprietorship or a corporation. Multiple-member LLCs can elect to be taxed as a partnership or a corporation. The way a LLC claims profits and losses depends on this tax election.

How to File an Extension for an S Corp

An S corp, sometimes called an S corporation or a pass-through entity, is a business entity, such as a corporation or an LLC, that elects to be taxed under Subchapter S of the Internal Revenue Code. In general, this election allows the business to avoid being taxed at the corporate level. Nevertheless, an S corp must still file a tax return, Form 1120S. If necessary, you can file for a six-month extension of time to file.

What Is an LLC 1065 Filer?

Though a business may select to be an LLC under state law, the federal government does not allow a business to file federal income taxes as an LLC. A business may choose to file federal income taxes as either a partnership or as a corporation. When a business files taxes as a partnership, it must send Form 1065, called Return of U.S. Partnership Income, to the IRS to report its earnings.

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