How Do I File Taxes for an LLC?

By Brette Sember, J.D.

How Do I File Taxes for an LLC?

By Brette Sember, J.D.

How your limited liability company (LLC) files income taxes depends on how you choose to designate your business to the Internal Revenue Service (IRS). Because the IRS does not recognize LLCs as business entities, LLCs are taxed as sole proprietors, partnerships, or corporations, depending on how many owners there are and what type of entity the LLC elects with the IRS.

Man sitting at desk looking at phone in front of laptop

Filing Taxes as a Sole Proprietorship

If your LLC has just one member, you can file as a sole proprietor or elect to file as a corporation. To file taxes as a sole proprietor, you need to complete Profit or Loss From Business (Form 1040, Schedule C) as part of your individual personal taxes. If there is no income to report, you do not need to file this form. If your business deals with a specialized industry such as farming or fishing, file Supplemental Income and Loss (Form 1040, Schedule E), Profit or Loss from Farming (Schedule F), or Income Averaging for Farmers and Fishermen (Schedule J) instead of Schedule C.

Filing Taxes as a Partnership

If your LLC has more than one member, you can be taxed as either a partnership or a corporation. Make the election using Entity Classification Election (Form 8823). To file taxes as a partnership, you must complete Return of Partnership Income (Form 1065) and file it with the IRS. You also need to complete Schedule K-1 for each member and provide a copy to them. The partnership itself does not pay taxes. Instead, each partner reports their share of the profit and loss from the business on their own personal taxes. The K-1 sets out that partner's profit and loss to be reported.

Filing Taxes as a C Corporation

If you choose to be taxed as a corporation, make the election using Form 8823. When you select taxation as a corporation, it is automatically a C corporation, unless you file further documents, as described below. As a C corporation, you must file U.S. Corporation Income Tax Return (Form 1120).

Filing Taxes as an S Corporation

If your LLC has designated itself as a corporation, you can choose to become an S corporation, which you do by filing Election By a Small Business Corporation (Form 2553). Once you have made this election, file U.S. Income Tax Return for an S Corporation (Form 1120S). The corporation itself is not taxed on profit and loss. Each owner must be given a Schedule K-1, detailing their share of profit and loss, which they report on their own personal income tax.

Filing Federal Employment Taxes

If you are a sole proprietorship, you must file Self-Employment Tax (Form 1040, Schedule SE). If your LLC has employees, file Employer's Annual Federal Unemployment (FUTA) Tax Return (Form 940) and either Employer's QUARTERLY Federal Tax Return (Form 941) or Employer's ANNUAL Federal Tax Return (Form 944).

Filing State Taxes

Check your state laws to determine what, if anything, your LLC needs to file for state income taxes. State filings usually mirror the federal filings, meaning partnerships file as partnerships with the state, corporations as corporations, and so on. However, as this is not true in all states, be sure to research your state's particular requirements. You also need to determine what you need to file for state employment taxes and sales taxes.

When forming your LLC, you can choose to work with an online services provider to help with the process. Following the right procedure and filing the correct forms can ensure that your LLC meets its tax obligations.

This portion of the site is for informational purposes only. The content is not legal advice. The statements and opinions are the expression of author, not LegalZoom, and have not been evaluated by LegalZoom for accuracy, completeness, or changes in the law.