LLC taxes can be rather confusing at first because you, as the owner, have so many choices you must consider. Part of this stems from the reason why LLCs developed in the first place: they offer increased flexibility for business owners as well as corporate level protection, meaning that you can set your LLC up to work in the way that works best for you.

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Identify What Tax Form You’ll Use

When it's time to file taxes for your LLC, your first step is to identify what kind of LLC you have. The default setting of LLC taxes is based on who or what you are when you created the LLC. If you ran a sole proprietorship, then the default setting for your LLC's taxes is a sole proprietorship, meaning you can use your own income tax form. If you ran a partnership, then the default setting is the partnership tax return, complete with Schedule E. If you ran a corporation, then the default setting is a C Corporation tax return.

Petition the IRS to Be Taxed Differently, If Applicable

However, if you don't like your current tax setting, you can always petition the IRS to be taxed in another way. You must petition the IRS with your request, and, if granted, that's how you will file your taxes. Do not decide to just file your taxes for the tax status you want. The IRS will penalize you for failure to comply. Instead, you must wait until you get approval.

Pay Estimated Quarterly Taxes

When filing your taxes for your LLC, remember that you will have needed to pay estimated quarterly taxes as well as filed your annual tax reports. In many cases, S Corporations avoid having to make estimated quarterly tax payments, but LLCs taxed as S Corporations still must pay these. You fill out all of the financial information for the entire year on the annual tax return, including information on the estimated payments. Check to make sure that the amount paid is at least 90 percent of what you will actually owe. Otherwise, you'll be liable for underpayment charges.

Know When to File

Currently, there's some debate about when taxes for LLCs must be filed, depending on the kind of default taxation setup you have. Most corporations must file their taxes by March 15 unless they've been granted an extension. Generally, all businesses for profits, including LLCs, fall into the same category, but some have argued that small LLCs with the default sole proprietorship setup should be permitted to file by April 15. The IRS has not issued any clarifications for 2013. So, to be safe, file by March 15 unless you receive an extension, regardless of the default taxation setup on your LLC.

The Bottom Line for Filing LLC Taxes

LLCs can be rather confusing when you're first trying to sort out LLC taxes. Fortunately, it's much simpler than what you might think. The default setting for your LLC taxes all depends on what you were when you filed to create the LLC. You'll still have to pay your estimated quarterly taxes and compare these against the amounts on your annual tax returns. For your filing deadline, plan on March 15 regardless of the size of your business or what it does. 

Get Started Start your LLC Answer a few questions. We'll take care of the rest.

Get Started Start your LLC Answer a few questions. We'll take care of the rest.