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The Curious Bag
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A Limited Liability Company (LLC) is not recognized by the IRS as a tax classification. Each LLC must therefore file taxes as a sole proprietorship, partnership, S corporation or corporation depending upon the business structure.
Choosing Tax Status
If your LLC is going to file as a corporation, you do not need to file additional paperwork. If you are choosing any other option, you must file IRS Form 8832 to declare the tax entity for your LLC.
Sole Proprietorship
An LLC owned by one member may file taxes as a sole proprietor. This LLC will use the Schedule C on the individual owner's personal 1040 tax return.
Partnership
If the LLC is a partnership, then taxes will be filed using IRS Form 1065. Each partner will also get a Schedule K-1 to show their share of the profit or loss from the business on their personal tax return.
S Corporation
An LLC can choose to file taxes as an S Corporation which uses IRS Form 1120S. Each shareholder receives a Schedule K-1 to show their share of the business profit or loss on their personal tax return.
Corporation
An LLC that files taxes as a corporation uses IRS Form 1120. This is a standalone return and no profit or loss from the business is carried onto shareholders personal tax returns.
Source:
Limited Liability Company (LLC)
LLC Filing as a Corporation or Partnership
Single Member Limited Liability Companies
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