“What tax forms do I need to file for an LLC?” This question appears as a usual concern for those who set up an LLC (or a limited liability company). According to the Internal Revenue Service (IRS), LLC tax filing requirements are based on the company’s classification and number of members. Here’s a rundown of the classifications provided by IRS, and the corresponding tax forms an LLC needs to file.
LLC Tax Filing Requirements Per IRS Classification
LLC as Disregarded Entity
The IRS classifies most LLC with just one member as an entity separate from its owner. In this case, the owner report tax declarations on the following Form 1040 schedules:
- C (on business profit or loss for sole proprietorship)
- C-EZ (on net business profit for sole proprietorship)
- E (on supplemental income and loss)
- F (on farming profit or loss)
The sole LLC member should not file an income tax return. The member, however, is considered a corporation for purposes of employment tax, and for collecting income and excise taxes. The following forms contain instructions and other information about this classification:
- 637 (on registration for excise tax activities)
- 720 (on returns for quarterly federal excise tax)
- 730 (on monthly tax return for wagers)
- 2290 (on tax return for heavy highway vehicle)
- 11-C (on wagering occupational tax and registration return)
- 8849 (on excise tax refund claims)
LLC as Partnership
An LLC with two or more members and is classified as a partnership must file Form 1065 (U.S. Return of Partnership Income). Only the LLC’s member manager can sign the partnership tax return. If there’s no designated or elected member manager, then each LLC owner is treated as member manager.
LLC as Corporation
An LLC, regardless if it has a single or multiple members, can choose to be classified as a corporation. In this case, the following forms need to be filed:
- Form 8832 to elect classification as a C corporation. The filer attaches a copy of this form to the federal income tax return of each LLC owner.
- Form 2553 to elect classification as an S corporation
An LLC classified as corporation must also file a corporation income tax return. This is filed either in Form 1120 or Form 1120S.
Change in LLC Classification
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An LLC may opt to change its classification. However, the LLC can only apply for the change 60 months after a previous classification change becomes effective. Also, classification changes have corresponding tax consequences. More details may be viewed in Publications 541 and 542 of the IRS.
To fully understand the LLC tax filing requirements and rules, here’s an explanatory video from Legalees:
Understanding the LLC tax filing requirements will help members comply properly with the rules of IRS. The IRS has clearly specified guidelines for each company classification that there’s no more need to ask “What tax forms do I need to file for an LLC?”.
Do you have any issues about these LLC tax filing requirements? Tell us your concerns and clarifications in the comments section below.
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