Tax Return for LLC
Tax return for LLC? Wondering what to do? The short answer is that it depends. I know that is a nice “lawyerly” comment but it really does depend on which election you made after you filed your SS4. If you didn’t file an SS4, you are probably an only member of the LLC.
Generally, if you are the only member of your LLC and you have not filed a tax election, you do not have to file a special tax return for LLC. For tax purposes, you will file the LLC’s income on your own federal tax return. Your LLC is an ignored or “disregarded” entity. This means that you will report your LLC income and expenses on your own Form 1040, using Schedule C, E, or F form. Your income is passed through your LLC directly to you. Remember this is only for tax purposes. It does not change the fact that your business is legally a Limited Liability Company.
Tax Rules Determine Which Tax Return for LLC
The LLC tax rules were defined by the IRS. At the time the LLC was first devised in Wyoming, the legislators didn’t know how the IRS would tax it. They contacted the IRS and asked how it would be taxed. The IRS could have created another section of the code describing specific taxation rules for the LLC, but they didn’t. The IRS decided that they would let the LLC owner determine how it would be taxed. The owner could make an election. You can find what you need for this election at the following IRS website.
When you make a tax election, the legal structure And the liability protection of your LLC will remain the same. It doesn’t matter which tax structure you choose. When you file a tax return for llc, you file a return according to what you have elected.
If you have filed an SS4 and elected to be a partnership at the end of the year you will use a 1065 form.
It is sometimes a good idea to have your LLC taxed as a corporation. There are many tax benefits available to a corporation, but to qualify for these benefits you have to make this election and file with the IRS when you set up your LLC. If you have elected to be a corporation then you will file taxes as a corporation.
