LLC Tax Return Filing is important to remain compliant with US regulations. Let’s learn all about LLC Tax Returns through this article.
Do LLCs in the USA need to file tax returns?
Yes, businesses having LLC registration in the USA do need to file tax returns. Even if you are not earning any income from it, you will still need to file LLC tax returns. In this case, you will have to file nil tax returns. LLCs might need to pay taxes at the federal level and state level as well.
Steps to File LLC Tax Return in USA
1. Determining your Classifications
The IRS treats LLCs as a corporation, partnership, or disregarded entity based on elections made and the number of members. So, depending on your classification of LLC, you will need to decide which type of return you need to file.
A domestic LLC with at least two members is classified as a partnership for federal income tax purposes. Therefore, to be treated as a corporation, it must file Form 8832 and elect this status.
On the other hand, An LLC with only one member is treated as a disregarded entity (part of the owner’s tax return). As a single-member LLC, you might not need to file separate returns as you can share all the details and pay taxes on your personal return.
2. Filing of Forms on IRS Portal
You will need to file LLC tax return filing forms as per the following:
LLC Classified as a Partnership
- Normal partnership tax rules apply if an LLC is classified as a partnership. The LLC must file Form 1065, U.S. Return of Partnership income.
- Each owner reports their pro-rata share of income, credits, and deductions on Schedule K-1 (1065). Furthermore, members must pay self-employment tax on their share of partnership earnings.
LLC Classified as a Corporation
- Normal corporate tax rules apply to LLCs that classify them as corporations for USA company compliance. In this case, the LLC must file Form 1120, U.S. Corporation Income Tax Return.
Important Note: For C Corporations, there are no flow-through items to individual tax returns (e.g., Form 1040 or 1040-SR).
LLC Classified as an S Corporation
- A qualifying LLC elected as an S Corporation files Form 1120-S, U.S. Income tax return. In this case, S Corporation laws apply to the LLC. Consequently, each owner reports their pro-rata share of income, credits, and deductions on Schedule K-1 (1120-S).
3. Pay the Taxes
After filing the forms, you will be required to pay taxes. You can pay taxes online on the IRS portal through several methods such as:
- Direct Pay (free, using your bank account),
- Debit/Credit Card (fees apply, via third-party processors),
- Electronic Funds Withdrawal (EFW) (when e-filing), or by setting up an Installment Agreement for monthly payments.
4. Seek Professional Assistance
Tax laws for LLCs can be complex. Furthermore, you may not understand all the deductions available to you. It is also hard to maintain accurate records and follow the correct procedures. Hence, you must not hesitate to seek professional assistance. A qualified tax professional or CPA from E-StartupIndia’s team can provide personalized guidance and ensure your LLC taxes are filed accurately and swiftly.
Moreover, If you want any other guidance relating to LLC Tax filing Returns in USA, USA company compliance or Company Registration in USA, please feel free to talk to our business advisors at 8881-069-069 .
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