LLC Tax Returns: IRS LLC Filing

A Limited Liability Company (LLC) is a business entity that combines taxation aspects of a sole proprietor or partnership with the limited liability of a corporation for federal tax purposes. Federal tax regulations impact how an LLC files its taxes, including the default classifications based on its structure and the potential tax elections, such as being taxed as a C corporation or an S corporation. An LLC protects the personal assets of its owners without the more cumbersome requirements of a corporation.

How Limited Liability Company (LLC) Help you?

• Asset Protection
• No Corporate Tax – LLCs that do not elect to be treated as corporations do not have to pay corporate income tax, meaning they do not pay taxes at the entity level. Instead, the income passes through to the owners, who then pay taxes on it.
• Less Paperwork – LLCs that have not elected corporate status do not file separate corporate tax returns, hold annual meetings, appoint officers or record minutes of shareholder meetings.
• Lower State Fees – in some states, LLCs pay significantly lower fees than corporations.
• State Income Taxes – LLCs and their members may need to file state income taxes in every state in which they do business. This can involve different tax forms and due dates, and it is important to make accurate payments on state taxes. Consulting experienced tax advisors is recommended for guidance.
• Flexibility – LLCs can have one member or many, and can elect to be treated as S Corporations or even C Corporations

How are LLCs Taxed for Federal Income Tax Purposes?

Single member LLCs are taxed as sole proprietors, known as a disregarded entity, and multimember LLCs are taxed as partnerships unless they elect to be treated as a corporation. Double taxation can occur when an LLC files a corporate tax return, pays tax on the income, and distributes its profits to its owners, but it can be avoided by electing to be taxed as a pass-through entity, like an S corporation.

As LLCs grow, the advantages of an S Corporation or C Corporation may outweigh the disadvantages. There are many factors here and no one-size-fits-all. It is recommended you contact an EA or Accountant at Torchlight Tax to see which is most advantageous to you at your current stage of expansion.

LLC tax returns can be confusing to prepare, especially considering the self-employment tax implications for LLC owners. Few business people are trained to do these. With the help of an EA or CPA from Torchlight Tax, you can maximize your tax savings and have your taxes filed without a lot of hassle or wasted time. In addition to tax savings, proper accounting can assist in pinpointing your most profitable and unprofitable activities, and this data can be used to increase profits. LLC members report their share of profit or loss on Schedule E of their personal tax returns. Additionally, LLC members may need to make estimated tax payments using Form 1040-ES to cover self-employment and personal income tax.

Business Income Tax Preparation in the Las Vegas Valley

When it comes to tax preparation, accounting, and IRS representation in the Las Vegas Valley and nationwide, Torchlight Tax is ready to save you tax dollars, including assistance with your LLC or corporate income tax return. For LLCs, we also help in reporting business income on the owner’s personal tax return.

Contact us today for assistance in LLC, S corporation or C corporation tax returns. Free Consultations are available.

Call us at 1-877-758-7797 or 702-463-1818 or email us at info@TorchlightTax.com. We can transfer your call to a branch office near you or help you directly from our central office.