LLC Tax Forms: What You Need to File With the IRS

Key Takeaways

• LLC tax forms depend on how the LLC elects to be taxed: sole proprietorship, partnership, S corp, or C corp.
• Single-member LLCs file IRS Form 1040 with Schedule C, E, or F; multi-member LLCs typically use Form 1065 with K-1s.
• LLCs taxed as corporations must file Form 1120 (C corp) or 1120S (S corp), and possibly Form 8832 or 2553.
• Additional tax forms like 940, 941, and 1099 may apply for employment and contractor payments.
• Important deadlines and penalties apply, and some forms must be filed even if no income is reported.

The IRS forms for LLC filings vary. Limited Liability Companies (LLCs) are required to file one of the following forms, depending on how it has chosen to be taxed:

• Single-member LLCs will file IRS Form 1040 (Schedule C, E, or F)
• Single-member LLCs cannot file partnership return forms
• Multiple-member LLCs may file Form 1065, which is for partnerships
• S corporations will file IRS Form 1120S
• C corporations will file IRS Form 1120
• LLCs who opt to file as a corporation must also file IRS Form 8832

IRS Publication 3402 is Tax Issues for LLCs, and it can provide assistance in determining which tax reporting form is best for your business. Once you elect one tax status, you are required to keep that status for five years.

LLC Tax Filing Rules

Operating as an LLC offers tax flexibility regarding profits and losses. The tax structure you choose determines what tax rules you fall under. There are no separate tax rules for LLCs as LLCs choose whether to be taxed as a sole proprietorship, partnership, or corporation. Once you create the LLC, you default to a partnership in the eyes of the IRS for tax status. If you are the only owner of the LLC, then you are required to pay taxes as if you were a sole proprietorship.

The IRS requires Form 1065 for LLCs being taxed as a partnership. This form is strictly for informational purposes as all income and losses and reported by individual members on their returns. The LLC will also report each member's share on a Schedule K-1 at the end of every year.

LLCs that opt to be taxed as a corporation will be treated as a separate legal entity from its employees for tax purposes. The business is then responsible for reporting all income and losses on Form 1120 and paying owed taxes by the filing deadline.

One drawback to being taxed as a corporation is that the corporation's profits are subject to "double taxation." The first level of taxation occurs at the corporate level, and the second occurs when dividends are paid to members. Each member is required to report the dividend on IRS Form 1040 and pay taxes.

Filing as a sole proprietorship means you are responsible for all taxes and filings. This is what the Schedule C attachment is for. Schedule C is only used for profit and losses that related to the business. If there is a profit showing on the Schedule C, the amount is added to other income reported on IRS Form 1040.

IRS Form Overview by LLC Classification

Choosing the correct LLC tax form starts with understanding how your LLC is taxed:

• Disregarded Entity (Single-Member LLC): The IRS considers a single-member LLC a “disregarded entity” by default. The owner files income and expenses using:
  • Schedule C (Profit or Loss from Business)
  • Schedule E (Supplemental Income and Loss for rental income)
  • Schedule F (Profit or Loss from Farming), if applicable
  • These forms are attached to Form 1040.
• Partnership (Multi-Member LLC):
  • Must file Form 1065, U.S. Return of Partnership Income
  • Each member receives a Schedule K-1 for individual tax reporting
  • Even if no income is earned, filing is required to avoid penalties
• C Corporation:
  • File Form 1120, U.S. Corporation Income Tax Return
  • Must also pay corporate tax on profits; shareholders report dividends separately
• S Corporation:
  • File Form 1120S, U.S. Income Tax Return for an S Corporation
  • Distribute Schedule K-1s to members for personal income reporting
  • LLCs electing S corp status must also file Form 2553 and possibly Form 8832

How to File Taxes for LLCs

While an LLC is formed under state law, it is not recognized as a business classification with the IRS. This is why LLCs are required to choose how they want to be taxed.

• File your 1040 Schedule C if filing as a sole proprietorship.
• If the LLC chose partnership status, file IRS Form 1065.
• Complete IRS Form 1120 if you elected corporate taxation. An LLC who chooses to be taxed as a corporation can go one step further and elect S corporation status in some cases if they qualify.
• File all federal employment tax forms and returns.
• If there are employees, the LLC needs to file Form 940 which is the Employer's Annual Federal Unemployment (FUTA) Tax Return, and Form 941, which is Employer's Quarterly Federal Tax Return.
• Check with your respective state's tax department to verify what state forms you need to file to comply with state LLC rules.
• Verify with your state's Department of Employment what you need to file to satisfy employment tax obligations in the state.
• Be sure to date and sign the return, whether you are mailing or filing electronically.

An LLC must file a 1099-MISC if the business made payments for rent or any other services that exceed $600 in the year. Verify what other 1099 forms you may need to file. For example, 1099-DIV is used to report any dividends from mutual funds, stocks, money market funds, or other banking products. They can also be used to report real estate transaction proceeds, secured property acquisitions, and any cancellation of debts.

Key LLC Tax Filing Deadlines

Meeting IRS deadlines is crucial to avoid late penalties. Here are key filing dates for LLCs:

If the deadline falls on a weekend or holiday, the due date shifts to the next business day.

Additional IRS Forms LLCs May Need

Depending on business activities, your LLC might also need to file:

• Form 941: Employer's Quarterly Federal Tax Return (for income tax, Social Security, and Medicare withheld from employees)
• Form 940: Employer’s Annual Federal Unemployment (FUTA) Tax Return
• Form 1099-NEC: For reporting nonemployee compensation, like contractor payments over $600
• Form 1099-MISC: For reporting rent, prizes, or other income
• Form 1099-DIV: If your LLC distributes dividends
• Form 1096: Summary transmittal for paper filing of 1099s
• Form 8829: Expenses for Business Use of Your Home (if applicable)
• Schedule SE: Self-Employment Tax (typically for sole members)

Be sure to retain detailed records and documentation in case of IRS audit.

Frequently Asked Questions

1. What is the default tax form for a single-member LLC?
   By default, a single-member LLC files Schedule C along with the owner’s Form 1040.
2. Can a multi-member LLC avoid filing Form 1065?
   No, Form 1065 is mandatory for LLCs taxed as partnerships, even if there is no income.
3. What form do I use if my LLC elects S corp taxation?
   You’ll need to file Form 1120S and distribute Schedule K-1s to each member.
4. Do LLCs have to file 1099s?
   Yes, if you paid $600 or more to nonemployees or for certain services, you must issue Form 1099-NEC or 1099-MISC.
5. How do I change my LLC’s tax classification?
   You must file Form 8832 (for corporate election) or Form 2553 (for S corp election) with the IRS.

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