For the purposes of taxes, the government does not recognize a limited liability company (LLC). LLCs will be required to fill out the tax forms that sole proprietors or corporations would fill out. The forms that a LLC will fill out will also depend on how many members are in an LLC and how the LLC member or members choose to be recognized.
LLCs consisting of one member are ignored for federal tax return filing and are to fill out Form 1040. Expenses and income from the LLC are to reported on Schedule C, E, or F. LLCs are ignored only for tax purposes; this does not impact the legality of an LLC.
W-2 & W-3 Forms
W-2 forms contain wage and tax information. W-3 forms are an LLC's proof of transmittal of wage and tax statements. The employees of LLCs are subject to withholding tax.
The Form W2-G is used to report any gambling winnings from events such as dog racing, bingo and slot machines.
Form 940 is an employer's annual Federal Unemployment Tax Return (FUTA). According to the IRS, an LLC will report and pay the FUTA tax if it either (a) paid wages of $1,500 or more in any calendar quarter during the calendar year, or (b) had one or more employees working for the company for at least some part of a day in any 20 different weeks during the calendar year.
Form 941 and Form 943
Form 941 is an employer's Quarterly Federal Tax Return and Form 943 is an employer's Quarterly Federal Tax Return for Farm Employees. An LLC employer must file a quarterly Form 941 to report wages paid, tips employees received, Federal income tax withheld, employer's and employee's share of Social Security and Medicare taxes, and any advance earned income tax credit payments. After filing the first Form 941, the LLC has to file the form every quarter even if there are no taxes to report.
Form 944 is an employer's Annual Federal Tax Return. The form is meant for the smallest employers so they can file and pay taxes only once a year instead of every quarter. The IRS notifies these employers if they qualify in February of each year.
Form 1065 is the U.S. Return of Partnership Income. LLCs with more than one member can file a partnership return. Partnership LLCs may also opt to file as a corporation and use Form 8832. Either form can be used to file taxes.
Form 1096 is the Annual Summary and Transmittal of U.S. Information Returns form. This form is completed by the IRS once the LLC sends the IRS forms 1099, 1098, 5498, and W-2G.
Form 1120 and Form 1120S
Form 1120 is the U.S. Corporation Income Tax Return and Form 1120S is U.S. Income Tax Return for an S Corporation. If the LLC consist of one member and is a corporation, the LLC income and expenses are reported on the corporation's return, usually Form 1120 or Form 1120S.
A Form 8832 is used if an LLC choose to file as a corporation. If an LLC chooses not to file as a corporation, this form is not needed.
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