LLC Taxes: Which Forms Your Small Business Should File & How

Officially establishing your business as a limited liability company (LLC) is an excellent choice due to its numerous advantages. You'll enjoy simplicity and flexibility in how you are taxed, along with protecting your personal assets, which shields you from business liabilities.

If you handle your business's financial work, you need to be aware of the forms you'll be responsible for preparing and filing. Whether you're experienced or new to the process, it's imperative to avoid mistakes and file on time. Use this detailed guide to learn about the information you'll need to complete each form, their deadlines, and other insights that will help you build your business and stay compliant. 

What Is an LLC?

An LLC is one of several entities businesses can choose to form as. To make an LLC entity selection official, you must submit paperwork to your state along with a fee. Fees typically range from $50 to $500.

Due to pass-through taxation, LLC owners cannot be held personally responsible for business debts, making it a popular choice for small business owners and entrepreneurs. 

How Does an LLC Report Taxes?

Choosing how your business will be taxed is among the numerous advantages of forming an LLC. LLC owners are taxed as sole proprietors, partnerships, S corporations, or C corporations. 

Which LLC Tax Forms Do I Need?

The tax form you will complete and file depends on how you've elected to pay your business taxes. For example, if your LLC is taxed as an S corporation, use Form 1120-S. 

Form 1040: Disregarded Entity or Single-Member LLC

Single-member LLCs are taxed as sole proprietorships if they do not elect to be taxed as a corporation. The LLC owner is known as a member. The IRS refers to this type of business as a disregarded entity, which indicates income passes through from the LLC to its owner to address on a personal income tax return.

Sole proprietors will file a Schedule C form with Form 1040, which reports business income and expenses. Schedule C calculates business taxable income for Form 1040. You may also use Schedule E to report supplemental income or losses and Schedule F to report profits or losses from farming. 

Form 1065: Multi-Member Partnership

A multi-member LLC is taxed by default as a partnership unless it elects to be taxed as a corporation. Partnerships must complete and file Form 1065 with the IRS.

Once Form 1065 is filed, each member will receive a Schedule K-1. They will use Schedule K-1 to report their portion of the business's profits and losses on their personal income tax returns. Member won't be able to complete their personal income tax returns until Form 1065 is submitted.    

Form 1120-C: C Corporation

For your LLC to be taxed as a C corporation, you must complete and file Form 8832 to alter your tax classification. Unlike other entities, C corporation income is taxed twice, first at the corporate level and then when profits are distributed to shareholders as dividends.

C corporations must also file Form 1120 annually detailing your business's profits and losses, tax deductions, income, and credits.

Form 1120-S: S Corporation

Like C corporations, you must also elect to be taxed as an S corporation. If your business meets eligibility requirements, file Form 2553 to be taxed as an S corporation.

Unlike C corporations, S corporations are pass-through entities like sole proprietorships and partnerships. This means that S corporations avoid being taxed twice. S corporations must complete and file Form 1120-S annually. 

Information Necessary for LLC Tax Forms

Use this list to gather information and materials required for the various LLC tax forms your small business may be responsible for.

EIN

Your Employer Identification Number (EIN) is like a Social Security number for your business entity. The IRS uses it to identify you on your LLC tax form for tax purposes.

If you haven't secured your business's EIN, let our experts help you apply for it online today.

Income Records

You will need to provide supporting materials to justify the income you're reporting. Income records you may need include: 

• Your business's bank deposits 
• All receipts issued to customers 
• All invoices issued to clients

Expense Records

Like your income records, you must provide supporting documentation for deductions related to your operating expenses. Supporting materials that qualify as expense records include: 

• Invoices related to services or products
• Vendor payments 
• Credit card statements 
• Bank statements 

Asset and Depreciation Records

If your business owns assets, you must maintain current records for tax purposes. Information to record includes: 

• When and how an asset was obtained
• The full purchase price
• Any costs to improve the asset
• Any deductions taken for a previous depreciation expense
• How the asset is used for the business 

Payroll Records

If you have employees, retaining records and documentation related to payroll is important. Key payroll documents include: 

• The Form W-2 issued to each employee
• Full pay records for each employee 
• Annual and quarterly payroll tax returns 
• Payroll tax and unemployment state tax returns
  

Save time on paying your employees with 1-800Accountant's affordable payroll service. 

Form 1099-NEC

If you paid a non-W-2 worker $600 or more during the tax year, you must complete and file a Form 1099-NEC detailing those payments. NEC is short for nonemployee compensation. The deadline to file this form is January 31st. 

Deadlines for Filing LLC Tax Forms

You must file your completed form and any supporting documents with the IRS by the deadline. Failure to file on time will result in penalties and increased scrutiny from the IRS. If you've missed a deadline, file as soon as you can. The IRS will charge interest on top of the initial penalty until your materials are submitted. 

Form	Deadline
Form 1065 Form 1120-S	March 15th
Form 1040 Form 1120-C	April 15th

Any deadline that falls on a Saturday, Sunday, or legal holiday is pushed to the next business day. 

How to File LLC Tax Forms

Once your tax form is ready for submission, you may transmit your materials to the IRS via traditional mail or electronically via e-filing. However, there are exceptions.

For example, if your partnership has more than 100 partners, you are required to file electronically. You are only allowed to submit partnership materials by mail if you have fewer than 100 partners. 

Work With Small Businesses LLC Experts

Gathering materials, correctly entering them into the right form, and submitting them to the IRS on time can be daunting, especially without a professional bookkeeping service. That's why many owners and entrepreneurs trust the tax professionals at 1-800Accountant, America’s leading virtual accounting firm for small businesses, for their financial needs.

Whether you need business tax preparation, tax advisory, or any of our professional accounting services, we have affordable pricing solutions to minimize your income tax liability while helping your LLC stay compliant. Schedule a quick consultation—usually 30 minutes or less to learn more.