How your LLC is taxed
An LLC is a legal structure, not a tax classification. By default, the IRS taxes it one of two ways, and it can choose to be taxed as a corporation instead:
Single-member LLC
Treated as a "disregarded entity." Income and expenses are reported on the owner's personal return, usually on Schedule C, and self-employment tax applies.
Multi-member LLC
Taxed as a partnership. The LLC files Form 1065 and gives each member a Schedule K-1 showing their share of income, which they report on their own returns.
An LLC can also elect to be taxed as an S corporation or a C corporation. That can reduce self-employment tax once profits reach a certain level. We'll tell you whether an election makes sense for you; see S-Corp Returns.
What's included
- Partnership return (Form 1065) with Schedule K-1 for every partner
- Schedule C for single-member LLCs, prepared with the owner's personal return
- State partnership returns, composite returns and annual LLC fees or franchise taxes
- Tracking of each partner's capital account and basis
- Extensions (Form 7004) when books aren't ready by the deadline
- Review of your books and year-end adjustments before filing
- Advice on entity elections and on paying partners through guaranteed payments
Key deadlines
For calendar-year partnerships, Form 1065 and the K-1s are due by March 15, a month before individual returns, so partners have what they need to file. An extension adds six months. Late partnership returns carry a penalty for each partner, for each month the return is late, so filing on time matters.
How it works
Share your books. Your profit and loss statement, balance sheet and bank statements, or access to your accounting software.
We review and adjust. We reconcile the accounts and identify missed deductions such as depreciation and home office.
Returns and K-1s. We prepare the business return and send each partner their K-1.
File and plan ahead. We e-file and set up estimated tax payments for the coming year.
Frequently asked questions
My LLC had no income this year. Do I still need to file?
A multi-member LLC taxed as a partnership generally must still file Form 1065 even if it had no income, and many states charge annual fees regardless of activity.
Should my LLC elect S-corporation status?
It can reduce self-employment tax once the business is consistently profitable, but it adds payroll and a separate return. We'll run the numbers for your situation.
Can you also prepare the partners' personal returns?
Yes. Many clients have us prepare both, so the K-1 flows straight into each partner's return.
