Key Takeaways

  • The forms needed for an LLC vary based on tax classification and state requirements.
  • Key IRS forms include Forms 1040 (Schedule C), 1065, 1120, 1120S, 8832, and 2553.
  • LLCs must also consider employment forms like Forms 940, 941, and 944.
  • Essential documents include Articles of Organization, Operating Agreement, and EIN application.
  • States may require separate forms for franchise tax, annual reports, and licenses.

IRS LLC forms will vary based on individual businesses' requirements. Limited Liability Companies (LLCs) will file a different form depending on how it has elected to be taxed:

  • Single-member LLCs will file IRS Form 1040.
  • Multiple-member LLCs will file IRS Form 1065, which is for partnerships.
  • S corporations will file IRS Form 1120S.
  • C corporations will file Form 1120.

If you opt to be taxed as a corporation, you will need to file IRS Form 8832. LLCs who choose to be taxed as a partnership don't need to file this form.

LLC Filing Rules

There are no set IRS rules for LLCs. In fact, the IRS automatically treats an LLC as a partnership for tax purposes, unless you elect a different status. However, single owners in LLCs are required to pay taxes as if they were a sole proprietorship. Once you've elected your business' tax status, you cannot change it for five years.

Key IRS Forms Needed for LLCs

Depending on your LLC’s tax classification and structure, the IRS requires different forms to ensure proper compliance. Below are the most common forms needed for LLCs:

  • Form 1040 with Schedule C: Used by single-member LLCs treated as sole proprietors.
  • Form 1065: Filed by multi-member LLCs taxed as partnerships.
  • Schedule K-1 (Form 1065): Issued to each member of an LLC taxed as a partnership to report their share of profits and losses.
  • Form 1120: Used by LLCs electing to be taxed as C corporations.
  • Form 1120S: Filed by LLCs electing S corporation status.
  • Form 8832: Used to elect a change in tax classification, such as switching from default treatment to corporate taxation.
  • Form 2553: Required to elect S corporation status for tax purposes.
  • Form 940: Employer’s Annual Federal Unemployment (FUTA) Tax Return.
  • Form 941: Employer’s Quarterly Federal Tax Return.
  • Form 944: Employer’s Annual Federal Tax Return (for smaller businesses eligible to file annually).

How to Follow LLC Taxes

LLCs follow local state laws, but the IRS still requires these businesses to choose their tax status.

If you've elected to have your business treated as a sole proprietorship, you will file Schedule C in addition to your IRS Form 1040. You will pay federal taxes on both income and losses through Schedule C. Some specialty businesses are required to use Schedules E, F, or J. Some of these include farming and fishing. To learn more about single-member LLC responsibilities, review the IRS's guidelines for single-member LLCs.

Partnerships will file Form 1065 and must be sure to provide all members with a Schedule K-1 so they can report income and losses on their personal tax returns. A partnership is treated as a pass-through entity, so the partnership itself doesn't pay income tax. Business income and losses are passed along to the LLC's members. Owners pay tax based on their share at the personal income rate. Schedule K-1s are like a W-2 for partnerships.

If you opted for corporation tax status, you will complete either the Form 1120 for C corporations or Form 1120S for S corporations. S corporations are also a pass-through entity, however, there are strict requirements in order to structure your business this way. Like a partnership, S corporations will need to issue a Schedule K-1 instead of the business paying taxes itself.

For LLCs that are filing as a partnership or sole proprietorship, owners need to pay self-employment tax on the Schedule SE. Any LLC with employees will also need to file Form 940, which is the Employer's Annual Federal Unemployment (FUTA) Tax Return and Form 941, which is the Employer's Quarterly Federal Tax Return, or Form 944, the Employer's Annual Federal Tax Return.

You will also need to contact your state tax regulatory office to verify what state forms your LLC is required to file. Some states don't look at business income taxes. Others do not treat LLC federal tax elections in the same way, especially the S corporation. This is why you need to talk to your local state tax authority to verify your LLC is in full compliance. Lastly, verify with your state's department of employment to file the appropriate forms and any potential sales taxes owed.

State-Level Forms and Annual Requirements

While federal forms are required by the IRS, each state imposes its own LLC compliance obligations. Common state-level documents and filings include:

  • Articles of Organization: Filed with your state’s Secretary of State to officially create your LLC.
  • Annual Reports or Statements of Information: Required by many states to keep LLC information up to date.
  • Franchise Tax or LLC Fees: States like California and Delaware charge annual franchise taxes or flat LLC fees.
  • Business Licenses and Permits: Depending on your industry and location, your LLC may need state or local licenses.
  • Registered Agent Documentation: Most states require LLCs to designate a registered agent and keep this information current.
  • Certificate of Good Standing: Often required when applying for business loans, foreign registration, or opening business bank accounts.

Consult your state’s Secretary of State website to identify and download the specific forms needed for your LLC.

Things to Keep in Mind with LLC Taxes

Form 1065 assists the IRS in determining that all members have reported income and losses correctly. If you're splitting LLC profits in a way that is different than member percentage of ownership amounts, you'll need to get a "special allocation" from the IRS. It's wise to consult with a tax attorney or accountant who can advise you on this.

Any multi-member LLC that has members who are not actively involved in the business may not have to pay self-employment taxes. These are individuals who invested but do not participate in any management decisions or operation activities.

Ensure you have covered any sales taxes owed, if applicable. Purchasers pay it and small business owners collect it and then turn it over to the respective authorities. The laws vary from state to state, which can be confusing, especially for those businesses who sell in multiple states.

Depending on the state, you may owe state taxes on your LLC. These are typically filed through your individual returns. Some states assess LLC income tax on top of whatever the members pay. Other states may require LLCs to pay a renewal fee, registration fee, or franchise tax. This is unrelated to any income.

Essential Internal Documents for LLC Operation

Beyond IRS and state filings, there are foundational internal documents every LLC should have:

  • Operating Agreement: Outlines ownership structure, member responsibilities, voting rights, profit sharing, and dissolution procedures. Required in some states and strongly recommended in all.
  • EIN Confirmation Letter (Form SS-4): The Employer Identification Number (EIN) is required to hire employees, open a business bank account, and file taxes. It can be obtained from the IRS.
  • LLC Membership Certificates: Useful for documenting ownership stakes, especially in multi-member LLCs.
  • Initial Resolutions or Meeting Minutes: Important for documenting early business decisions and actions by members or managers.
  • Banking Resolution: Allows members or managers to open a business bank account and act on behalf of the LLC.

Maintaining these internal records supports legal compliance and improves your LLC’s credibility with investors, lenders, and vendors.

Frequently Asked Questions

  1. What IRS forms are required to start an LLC?
    The IRS doesn’t require a specific form to start an LLC, but depending on your tax classification, you may need to file Forms 1040 (Schedule C), 1065, 1120, or 1120S.
  2. What is Form 8832 and who needs to file it?
    Form 8832 is used by LLCs to elect to be taxed as a corporation instead of the default sole proprietorship or partnership status.
  3. Do all states require an Operating Agreement?
    No, but several states like California and New York mandate it. Even if not required, it is highly recommended for structuring and resolving disputes.
  4. What’s the difference between Form 941 and Form 944?
    Form 941 is filed quarterly by most employers, while Form 944 is an annual version for smaller employers approved by the IRS.
  5. Is a business license required for an LLC?
    Yes, most LLCs need a general business license, and depending on the business type, additional industry-specific licenses or permits may be required.

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