What Tax Form Do I File for an LLC?

A Limited Liability Company (LLC) is a business structure that provides owners with liability protection, separating personal assets from business debts and obligations. While an LLC is a legally recognized entity formed at the state level, it is not a tax classification in the eyes of the Internal Revenue Service (IRS). Instead, the IRS taxes an LLC based on how it is structured or through an election made by its owners. The specific tax forms an LLC files depend entirely on this federal tax classification.

How LLCs are Taxed by Default

The IRS has default tax classifications for LLCs based on the number of owners, referred to as members. This pass-through taxation means the business itself typically does not pay federal income taxes. Instead, profits and losses are reported on the owners’ personal tax returns.

A single-member LLC is automatically treated as a “disregarded entity” for federal income tax purposes. This means the LLC’s income and expenses are reported directly on the owner’s personal federal income tax return, Form 1040, U.S. Individual Income Tax Return. The specific form used to detail business income and expenses is Schedule C (Form 1040), Profit or Loss From Business (Sole Proprietorship).

When an LLC has two or more members, it is automatically classified as a partnership for federal tax purposes. The LLC itself must file Form 1065, U.S. Return of Partnership Income. This form is an informational return, reporting the partnership’s income, gains, losses, deductions, and credits, but the partnership itself does not pay income tax. Each partner then receives a Schedule K-1 (Form 1065), Partner’s Share of Income, Deductions, Credits, etc., which details their individual share of the LLC’s profits or losses. Partners use this Schedule K-1 to report their share of the business income or loss on their personal Form 1040.

Electing Different Tax Statuses for Your LLC

While LLCs have default tax classifications, owners can elect for their LLC to be taxed as a corporation, specifically as an S corporation or a C corporation.

An LLC can elect to be taxed as an S corporation, which can potentially offer self-employment tax savings for active owners. This election is made by filing Form 2553, Election by a Small Business Corporation, with the IRS. To qualify for S corporation status, the LLC must meet certain requirements, including being a domestic entity, having no more than 100 shareholders, and having only eligible shareholders (generally U.S. citizens or residents, certain trusts, and estates). The form requires the LLC’s name, address, Employer Identification Number (EIN), date of incorporation or formation, and the desired effective date of the S corporation election. All shareholders must consent to the election and provide their names, addresses, and taxpayer identification numbers. Form 2553 generally must be filed no later than two months and 15 days after the beginning of the tax year for which the election is to take effect, or at any time during the preceding tax year.

Alternatively, an LLC can elect to be taxed as a C corporation, which may be beneficial for businesses planning to retain earnings for growth or seeking specific investment structures. This election is made by filing Form 8832, Entity Classification Election. This form allows an eligible entity to choose to be classified as a corporation, a partnership, or an entity disregarded as separate from its owner for federal tax purposes. To complete Form 8832, the LLC must provide its legal name, EIN, address, and the desired effective date of the election. The effective date can be no more than 75 days before the form is filed and no later than 12 months after the filing date. Once an election is made on Form 8832, the LLC generally cannot change its classification again for 60 months, or five years, without IRS consent.

Annual Tax Forms Based on Your LLC’s Classification

The specific federal income tax forms an LLC must file annually are determined by its chosen or default tax classification.

If an LLC maintains its default classification as a single-member disregarded entity, the owner reports the business’s income and expenses on Schedule C (Form 1040). A multi-member LLC taxed as a partnership files Form 1065. Each partner receives a Schedule K-1 (Form 1065) to report their share of income or loss on their individual Form 1040.

When an LLC has elected S corporation status, it files Form 1120-S, U.S. Income Tax Return for an S Corporation. The S corporation issues Schedule K-1 (Form 1120-S) to each shareholder, who then reports these amounts on their personal Form 1040.

If an LLC has elected to be taxed as a C corporation, it files Form 1120, U.S. Corporation Income Tax Return. Unlike pass-through entities, a C corporation is a separate taxable entity and pays its own income tax at the corporate level. After-tax profits distributed to shareholders as dividends are then taxed again at the individual shareholder level, a concept known as “double taxation.”

Additional Federal Tax Considerations for LLCs

Beyond the primary income tax forms, LLCs have other federal tax obligations and considerations. These apply regardless of the LLC’s chosen tax classification.

Most LLCs will require an Employer Identification Number (EIN), a nine-digit federal tax ID issued by the IRS. This number is necessary for multi-member LLCs and any LLC that elects corporate tax treatment. Single-member LLCs without employees may use their Social Security Number but often obtain an EIN for business banking or other operational reasons. An EIN can be obtained free of charge by applying online through the IRS website, which typically provides the number immediately, or by fax or mail using Form SS-4, Application for Employer Identification Number.

Many LLC owners are responsible for paying estimated taxes throughout the year. This applies to individuals, including sole proprietors, partners, and S corporation shareholders, if they expect to owe at least $1,000 in tax. Corporations generally must make estimated tax payments if they expect to owe $500 or more in tax. These payments are typically made quarterly using Form 1040-ES, Estimated Tax for Individuals, for individual owners, or Form 1120-W, Estimated Tax for Corporations, for C corporations. Estimated taxes cover income tax and, for pass-through entities, self-employment taxes (Social Security and Medicare taxes).

If an LLC has employees, it incurs federal employment tax obligations. These include withholding federal income tax, Social Security, and Medicare taxes from employee wages. The LLC must also pay its share of Social Security and Medicare taxes, along with federal unemployment tax (FUTA). Employers report and pay these taxes using forms such as Form 941, Employer’s Quarterly Federal Tax Return, and Form 940, Employer’s Annual Federal Unemployment (FUTA) Tax Return. Additionally, LLCs might have state and local tax responsibilities, such as annual registration fees, sales taxes, or state-level income and franchise taxes.