Questions About LLC Taxes? Chicago Business Lawyers to Help
Are you a business owner in the Chicago area looking for support with the complexities of LLC taxes2 min read
Are you a business owner in the Chicago area looking for support with the complexities of LLC taxes? When it comes to LLC taxes, there are many questions that arise. How you structure your LLC and report your taxes have serious implications and require the attention of an experienced business lawyer. UpCounsel’s online attorney community can provide the counsel you need. Our attorney community is comprised of lawyers with an average of 14 years of experience, who have been rated and reviewed by prior clients.
When forming an LLC, there are certain rules and regulations regarding taxes. Before you make any decisions, it's important to consider the taxation structure of your LLC and ensure that you're in compliance with all local, federal and state regulations.
To help business owners, here are answers to some of the most frequently asked questions about LLC taxes.
Why Should I Consider Paying LLC Taxes?
LLC taxes are an important part of maintaining the legal status of your LLC. All LLCs should pay taxes, regardless of whether the LLC has income or not. Working to understand and keep up with LLC taxes will help to ensure that your business remains compliant and is not subject to penalties from the IRS or relevant government agencies.
What Type of LLC Tax Structure Should I Use?
When determining the tax structure of your LLC, the two main considerations are whether to have a single-member LLC or a multi-member LLC. A single-member LLC is owned and managed by one member, while a multi-member LLC is owned and managed by more than one person. LLCs taxed as partnerships typically are multi-member LLCs. Generally, the tax structure for your business will depend on the number of members, how those members are classified, and the source of income.
How Do I Report My LLC Taxes?
The way you report taxes will depend on whether you are a single-member LLC or a multi-member LLC. Single-member LLCs are not taxed as separate entities, so the income of the LLC is taxed personally to the member. On the other hand, multi-member LLCs are generally taxed as partnerships. LLCs taxed as partnerships typically issue IRS Form 1065, Partnership Return of Income, which should be filed with IRS along with allocated shares of individual income tax returns (IRS Form 1040) for each partner.
Are There Deadlines for Filing LLC Tax Returns?
Yes, there are deadlines you need to adhere to when submitting LLC tax returns. Generally, LLCs taxed as partnerships must file IRS Form 1065 by the 15th day of the fourth month after the end of the tax year. IRS Form 1065 should include Schedules K-1, which report each partner's share of income, loss, and deductions.
If you need assistance understanding the complexities of LLC taxes, UpCounsel’s network of experienced business lawyers can help. Whether you need a one-time consult or an entire freelance legal department, our attorney community is ready to provide you the support you need.
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