How To File Taxes As An Llc Partnership

How To File Taxes As An Llc Partnership

How To File Taxes As An Llc Partnership – There are two types of people come tax time. You have those who get excited and file their taxes the first day they can. And, you have those who moan and groan and file at the last minute. Where are you?

You’re probably the second person whose least favorite thing in the world is filing your small business tax return. If that’s the case, you need a small business tax preparation checklist.

How To File Taxes As An Llc Partnership

How To File Taxes As An Llc Partnership

Or maybe you’re the first one who can’t wait to file your company’s tax return. In that case, you may have already created your small business tax return checklist and want to compare.

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Whatever the case, read on to review our small business tax prep checklist … and say goodbye to procrastination.

Some might argue that checking things off their to-do list is fun. Fun or not, using a checklist can help you stay organized and accurate. And who wants to lose tax deductions or pay penalties because of a sloppy return?

Use this small business tax preparation checklist this tax season to help you stay on top of your responsibilities:

Your first task on the small business tax prep checklist is to find out which form you need to file. There is no standard form that all small businesses use—your form depends on your business.

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Are you a sole proprietor or a member owner of an LLC? Use Schedule C, Income or Loss from Business, and attach it to your personal income tax return (Form 1040).

Or, are you a partner or part owner of a multi-member LLC? If so, file Form 1065, U.S. Return of Partnership Income, and attach Schedule K-1 (Form 1065).

And for those of you who need a corporate tax preparation checklist, your tax form is Form 1120, U.S. Corporation Income Tax Return. Multi-member LLCs that are taxed as corporations also use Form 1120.

How To File Taxes As An Llc Partnership

Last but not least, the tax form you should use if you structure as an S Corp is Form 1120-S, U.S. Income Tax Return for S Corporation.

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The next step on your small business tax preparation list is knowing when business taxes are due. Your filing deadline depends on the structure of your business.

Sole proprietorships, single-member LLCs, multi-member LLCs taxed as corporations, and corporations that end their tax year on December 31 must file by April 15. This is the same due date as personal tax returns.

If March 15 or April 15 falls on a weekend or holiday, you have until the next business day to file.

All of the steps in the small business tax prep checklist are important. But this one can be one of the longest, most complicated, and most important parts of preparing an accurate tax form.

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Filling out tax information is not a guessing game. You can’t just input income and expenses based on a hazy memory. You need to have the hard facts in front of you if you want to complete an accurate return.

Find your taxpayer identification number. This is important. How else will the IRS recognize your business? Depending on the structure of your business and whether you have employees, you may be able to use your Social Security number. Otherwise, you must use your Federal Employer Identification Number (FEIN).

Next, gather and analyze your balance sheet and income statement. If you use accounting software, creating these reports should be easy to do. Your income statement lists your business’s income, expenses, and bottom line for the entire year. And, your balance sheet shows your assets, liabilities, and equity.

How To File Taxes As An Llc Partnership

In addition to your financial statements, you will need some supporting documents. Gather your receipts, bank statements, credit card statements, and payroll records to back up your work.

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Also, be prepared to find copies of your estimated tax payments. And, find your business tax return for the previous year.

The next stop on the tax preparation train is finding out if you qualify for a tax break. Business tax credits and deductions are a great way to lower your tax liability. And depending on your business, you may qualify for some.

Businesses can claim tax deductions and credits for qualifying expenses. In general, tax credits encourage businesses to take some kind of action that benefits others (for example, offering reasonable accommodation).

Before claiming a credit or deduction, make sure you have records to back it up. And, you need to understand the IRS rules. For example, you can’t claim a home office tax deduction unless you meet certain IRS requirements.

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If you are self-employed, you must make estimated tax payments to cover your debts. No one withholds taxes from your paycheck if you are self-employed.

Business owners pay estimated taxes quarterly. If you have made estimated tax payments throughout the year, you can deduct them from your total tax liability.

Instead of putting together something questionable, you may decide to file a business tax extension. A filing extension gives you more time to complete and file your small business tax return.

How To File Taxes As An Llc Partnership

If you need an extension on your tax return, you must submit the IRS extension form before the due date of your tax return.

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You may need to prepare for a situation where you cannot pay your taxes in one lump sum.

Although estimated tax payments are helpful, you may have miscalculated your liability and left too many expenses at tax time. If that’s the case, you need to know your options and stick with the one that meets your business needs.

Regardless of which tax payment option you pursue with the IRS, you must file your tax return on time (unless you received a filing extension).

Once you’ve gathered all your records and made some preliminary decisions about the deductions and credits you’ll be able to claim, it’s time to turn to your accountant.

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Your accountant can help verify that your return is accurate. They may also be able to find other deductions or credits you may be entitled to. And, an accountant can help you through the filing process to make sure your return is solid.

Finally, you’ve reached the last box to check off on your small business tax return list. After you and your accountant give the green light, it’s time to file.

You can e-File or paper file your business tax return. E-Filing is a faster process than paper filing, and you will receive instant confirmation that your filing went through.

How To File Taxes As An Llc Partnership

If you decide to e-File through the IRS system, you can pay taxes through the Electronic Federal Tax Payment System (EFTPS).

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Want to speed up tax time? Track your expenses and income throughout the year with Patriot’s online accounting software. Get your free trial today!

Get up and running with free payroll setup, and enjoy free expert support. Try our payroll software with a free, no-obligation 30-day trial. This article was co-authored by Darron Kendrick, CPA, MA and staff writer, Jennifer Mueller, JD. Darron Kendrick is an Adjunct Professor of Accounting and Law at the University of North Georgia. He received his Masters degree in tax law from the Thomas Jefferson School of Law in 2012, and his CPA from the Alabama State Board of Public Accountancy in 1984.

There are 8 references cited in this article, which can be found at the bottom of the page.

A limited liability company (LLC) is a business structure created under state law. The IRS does not recognize the LLC as a business classification. If you are the sole owner of the LLC, you must file taxes as a sole proprietor. If you have partners in your business, you can file as a partnership or choose to be taxed under corporate tax rules.

How To File Llc Taxes

[1] X Trusted Source Internal Revenue Service US government agency that administers the Federal Tax Code Go to source

This article was co-authored by Darron Kendrick, CPA, MA and staff writer, Jennifer Mueller, JD. Darron Kendrick is an Adjunct Professor of Accounting and Law at the University of North Georgia. He received his Masters degree in tax law from the Thomas Jefferson School of Law in 2012, and his CPA from the Alabama State Board of Public Accountancy in 1984. This article has been viewed 12,476 times. This page is a collection of blog sections we have around this keyword. Each header is linked to the original blog. Each link in Italic is a link to another keyword. Since our content contains more than 400,000 articles, readers have asked for a feature that allows them to read/discover blogs surrounding certain keywords.

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How To File Taxes As An Llc Partnership

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