How do we file our taxes as an LLC?

Question

A two person LLC with no employees. How often do we file and which forms do we use? Do we each file as if we're self-employed?

Answer 1

I just asked a similar question a short while ago. I hope the answer will help you too. But I had a few more questions reguarding the matter that may help you as well.



Here's the link:

https://answersrip.com/question/index?qid=20081111182639AA5VRxc



Here's the answer:



(thanks superj300)

If you have a business registered with an EIN, use the EIN for everything. Part of the purpose and benefit of incorporating is to prevent personal liability in the event of legal or financial troubles, and using your SSN when you have an EIN is not only incorrect, but may make you legally liable if anything goes sour. Think about it like this....if you owned a company with 30 employees that were all paid through the company, would you use your SSN or EIN on your 941s and whatnot? Of course you'd use your EIN, and the same goes in this case. A W-9 doesn't get reported to the IRS; the broker will hold it and use whatever name, address, and TIN you put on it to report whatever they are reporting on your 1099....non employee compensation, I'm assuming, unless this is an investment. Whatever TIN you put on the W-9 is where the 1099 will go to come tax time, so if you don't want to be personally liable for whatever income indicated on the 1099, you should put your EIN on the W-9.



To the issue of what tax form to use. Multi-member LLCs will file a 1065 "partnership" return with the IRS. Then, the K-1 that is generated by this return gets reported on your personal return. NEVER file a 1040 as multi member LLC. Single member is fine on your 1040, although again it raises the issue of liability, but multi member should definitely be on a 1065.



If I could offer one further piece of tax advice, you may want to look into filing S-elections in your state and with the IRS. Being an S-corp has additional tax advantages that may be worth it depending on your income levels and whatnot. However, remaining an LLC may also be beneficial depending on your state. In NJ, for example, two-member LLCs avoid some of the corporate business taxes that S-corps are required to pay regardless of income. A competent CPA firm can analyze your books and advise you on what entity is most beneficial to your situation.

Answer 2

LLC = Ltd Liability Company 2 or more members default to a partnership 1 is a SMLLC (single member LLC) which is defaulted to a sole proprietorship. Not many states recognize LLC's as a partnership but as a corporation, even IF you file as a partnership for the FEDERAL return. You must check with your state on how it recognizes LLCs! Basically, you get the liability protection of a corporation but without the paperwork and headaches of setting up a corporation and don't have to issue stock. You can form an LLC without a lawyer or accountant but you should get a tax professional to read the document to make sure it's proper. Then file with your state the incorporation papers and get a Federal ID number for your LLC. You can "elect" to be a corporation but why choose an LLC in the first place? It's because people don't know better or you plan to change partners so that 50% of the capital/profits change which will end the partnership. Hence, the LLC's election to be a corporation! This is too complicated to be answered here at a forum. You should seek a local tax professional to assist you!

Answer 3

An LLC may be classified for Federal income tax purposes as if it were a sole proprietorship (referred to as an entity to be disregarded as separate from its owner that is no federal return for LLC is required.), a partnership or a corporation.



If the LLC has two or more owners, it will automatically be considered to be a partnership unless an election is made to be treated as a corporation.



Many states require annual returns to be filed and minimum taxes paid regardless of whether the venture turned a profit or not. You'll need to contact your state's department of revenue (or other tax authority) or a local tax expert for the rules for your state.



Read about partnerships, http://taxipay.blogspot.com/2008/09/partnerships.html

Answer 4

If you are unincorporated, you file as a partnership. This is form 1065, which issues k-1s to each partner. You use the partnership income to determine your self-employment income.

Answer 5

Use form 1120