NASE Blog Posts

I recently set up an LLC for my new business. Which tax form do I need to file?

Tuesday, September 08, 2009

The LLC will actually have to elect how it will be taxed for federal income tax purposes.

If you are the only owner of the LLC, it can choose either to be taxed as a sole proprietorship or as a corporation. If there are more than one owners then the option is to be taxed as a partnership or as a corporation. Most small-business owners organized as an LLC choose to be taxed as a sole proprietorship or as a partnership and not as a corporation in order to maintain pass through taxation.

If you are the only owner and elect to be taxed as a sole proprietorship then you will include a Schedule C, Profit or Loss from Business with your personal return. This is exactly the same as if you were not operating as an LLC but a sole proprietorship without the LLC filing entity. Here's a link to the 2008 IRS Schedule C Profit or Loss From Business tax form. The 2009 form isn't available yet. And here's the NASE's line-by-line guide to filling out Schedule C.

If there is more than one owner and you choose partnership, as most small-business owners would do, then the LLC will file a partnership income tax return which is form 1065.

In either case, if you choose to be taxed as a corporation then the LLC would file a form 1120, which is the corporation income tax return form.

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