Tax season is here! But have no fear because the IRS announced that Tax Day (April 15) is being moved to July 15 due to the COVID-19 pandemic. The deadlines for filing individual tax returns and for making payments of 2019 taxes owed are being extended by 90 days.
The payment deadline extension includes individual taxpayers, self-employed individuals and all entities other than C Corporations. Head to the IRS website for additional information on the IRS tax payment deadline extension.
However, even with a few more months to file and pay your 2019 taxes, don’t bring everything to a standstill. Being quarantined to your home should free up more time to get everything ready for filing your small business tax return. Here we’ll review the tax status of LLC business entities and identify which LLC tax forms you’ll need to complete for your taxes.
Limited Liability Tax Status
A limited liability company (LLC) has unique tax status — an LLC is a business entity type that allows business owners to keep their personal assets separate from those of the company. This effectively limits your own liability when it comes to company debts and responsibilities. An LLC combines the pass-through taxation of a partnership or sole proprietorship with the limited liability of a corporation, creating the best of both worlds for business owners.
When you form an LLC, your business becomes its own legal entity, with separate debts and legal matters. However, LLCs are still tied to your personal taxes. So what does this mean when it comes to filing your taxes?
Well, your LLC does not pay taxes for itself. Instead, the net income/loss is “passed through” to your personal income and is simply taxed as personal income, which is called pass-through taxation.
LLC Tax Forms You Need to File
Here is a list of forms you need to file as an LLC, whether it’s a sole proprietorship or a partnership.
Tax Forms for Sole Proprietorships
- Form 1099-MISC: You need to collect this form from any clients who have paid you at least $600 in the past year. So if you hired any contractors or freelancers and paid them at least $600 in the past year, you’ll need to file a 1099 to each person you’ve paid.
- Form W-2: These are from employers who withhold taxes from your income. The W-2 form reports an employee’s annual wages and the amount of taxes withheld from your paycheck.
- Form 1040: U.S. Individual Income Tax Return
- Form 1040 Schedule C: Profit or Loss from Business (Sole Proprietorship)
- Form 1040 Schedule E: Supplemental Income and Loss. This form reports supplemental income and loss from assets such as rental real estate, royalties, partnerships, S Corporations, estates and trusts.
- Form 1040 Schedule F: Profit or Loss from Farming
Tax Forms for LLC Partnerships
- Form 1065: This form is used for multiple-member LLCs
Tax Forms for LLCs Filing as an S Corp or C Corp
If you elect to have your LLC file taxes as an S Corporation, this can have some tax advantages to reduce your self-employment tax liability. However, filing as an S Corporation requires you to file Form 8832: Entity Classification Election, as well as Form 1120-S: Corporation Income Tax Return or 1120-A, the “short version” of this form.
Filing Your Business Taxes Today
In the wake of near-daily changes and updates for individual and small business taxes, consider leaning on Incfile to help you file your business taxes. Incfile’s tax professionals can help you stay on top of the most recent tax guidelines and LLC tax forms, find deductions and credits and give you advice.
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