What Tax Form To Use for an LLC?

Which tax form an LLC uses depends on how it is classified for federal income tax purposes under the entityclassification (“checkthebox”) regulations in Treas. Reg. 301.77011 through 301.77013. By default, an LLC with one owner is treated as a disregarded entity, and an LLC with more than one owner is treated as a partnership, unless the LLC elects to be treated as a corporation. 

Single-member LLC (one owner), no corporate election

You generally do not file a separate LLC income tax return for federal income tax purposes. The LLC’s items are reported on the owner’s return using the schedule that matches the activity (for an individual owner): Schedule C (business), Schedule E (rents/royalties), or Schedule F (farming); in some situations, additional forms and schedules (for example, Form 4797 for certain property dispositions) may also apply. 

Multimember LLC (two or more owners), no corporate election

The LLC generally files Form 1065 (U.S. Return of Partnership Income) and issues Schedule K1s to members. 

LLC that elects to be taxed as a corporation 

If the LLC elects corporate treatment, it files the corporate return that matches the election: 

• C corporation: Form 1120. 

• S corporation (if eligible and elected): Form 1120S (S status election is made on Form 2553; eligible entities that elect S status generally do not need to separately file Form 8832 to be treated as a corporation as of the S election’s effective date). 

Important related note (employment tax and certain excise taxes)

Even if a singlemember LLC is disregarded for income tax, it is treated as a separate entity for employment tax and certain excise tax purposes, which can create separate filing obligations (depending on facts). If you’re unsure about your specific tax situation, we have experts to assist you at Monily, connect today.  

State law note 

State income/franchise tax filings and annual LLC compliance requirements are administered at the state level and can differ from federal classification rules; the controlling authority is the applicable state revenue department/tax agency (and for entity filings/annual reports, often the state business filing office). Some states do not follow federal classification in all respects and may impose entitylevel taxes or fees on LLCs even when they are treated as disregarded entities for federal income tax purposes (for example, California requires LLCs classified as partnerships and disregarded entities to file Form 568 and pay an annual tax and an LLC fee). 

Sources 

IRS — Limited Liability Company (classification overview; default partnership vs disregarded; elections) 

California Franchise Tax Board — Limited Liability Company (LLC) (entitylevel annual tax and LLC fee, including for disregarded entities) 

California FTB — FTB Publication 3556, Limited Liability Company Filing Information (Form 568 filing, annual tax, and LLC fee requirements) 

Treasury Regulations — Entity classification regulations (26 CFR §§ 301.77011 through 301.77013, “checkthebox” framework; general classification rules) 

IRS — Overview of Entity Classification Regulations (practice unit summarizing Treas. Reg. 301.77011 through 301.77013) 

This information provided does not, and is not intended to, constitute legal advice.