Business Tax (LLC)

By default the LLC has option to file the following Income Tax Form

  • Individual Tax Return form 1040 and Schedule C
  • Individual partnership Tax Return form 1065

OR FORM 1120 OR 1120 IF THE LLC HAS OPTED TO BE TAXED AS CORPORATION )LLC CLASSIFIED AS CORPORATION)

How a limited liability company pays income tax depends on whether the LLC has one member or more than one member:

Single-Member LLC Income Tax

a single member LLC is taxed as a sole proprietorship. That is, the information about the LLC`s income and expenses, and its net income, is prepared using Schedule C. The net income from the Schedule C is brought over to Line 12 of the owner`s personal tax return (Form 1040 or other).

Multiple-Member LLC Tax

An LLC which has more than one member is pays income tax as a partnership. The partnership itself does not pay taxes directly to the IRS; the individual partners pay tax based on their share of ownership in the partnership. The partnership files an information return with the IRS on Form 1065. Then a Schedule K-1 is prepared for each partner, showing the share of the profit/loss of the partnership .The K-1 is filed with the partner`s individual return and the gain/loss is show on the partner`s Form 1040.

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