My wife and I have started an LLC. What income tax return do we use?

Answer 1

There are some good answers above, including the advice that you consult a competent advisor. Here's a summary of the basics:

* An LLC can be either a corporation or a partnership for US federal income tax purposes. In many (but not all) states, the state tax treatment follows the federal classification. Unless you file an election to be treated as a corporation, it will be treated as a partnership. You have 75 days from the date of organization to make that choice effective on day 1. You can make the election at any time, however.

* The choice between corporation or partnership should be made on the advice of a professional who is familiar with all your circumstances. A corporation generally must pay tax on its net income (after deducting expenses, including your salaries), while a partnership is a pass-through (meaning that partnership income is taxed directly to the partners). Thus, income earned through a corporation potentially can be taxed twice -- to the corporation when earned, and to the shareholders when distributed as dividends. However, many small businesses are able to "zero out" taxable income at the corporate level. In addition, income taxed to the corporation and not distributed may actually be taxed at a lower rate. A corporation may have tax advantages in your situation that outweigh the risk of double taxation.

Again, consult a pro for complete advice.

Answer 2

The LLC must file its own return. It then issues a K-1 to its members, which states how much income and interest was generated, and any changes in capital position. You have to add the K-1 information to your personal return.

Even though the LLC files tax returns, it typically does not pay federal tax. It is what is known as a pass-through entity for federal tax purposes.

Answer 3

This should not be used as a substitute for legal advice.

An LLC is a state designation only. What most people do not know is that an LLC is not a federally recognized entity. It is considered as a disregarded entity for federal purposes. You would still have to file form 8832, Entity Classification Election with the IRS. You can elect to be taxed or treated as a sole proprietor, partnership, or corporation.

Answer 4

no, I do not recommend setting up an LLC until it becomes a necessity for you to do so, for one thing is costs considerable money to establish one, you have to be registered in the state you are operating and in some cases a minimum annual tax regardless of what you do you can operate an LLC either as a sole proprietor(which to me makes the LLC moot) you can operate as a partnership if you are more than one, and the profit flows thru to the partners who report their K(1) as self employed income on their own sch C(and SE) as a corporation, that entity files its own return pays it own taxes, if you are an employee of the corp, you will have FICA withheld and the corp will match it, as an employer does when a corp declares a dividend, the 1099 D issued to the shareholders is taxable to the shareholders taxes are not assessed on the amount in the bank, the Profit is the taxable figure on which taxes are calculated

Answer 5

With LLC you have a choice of what forms to file. You can file as a corporation (1120), partnership (1065) or sole proprietor (schedule C of your 1040). To decide what is the right choice for you, you need to take into account a lot of variables that affect your financial situation. For that you should seek the help of a tax professional.

Answer 6

You have options. How large and complex is your business? Will you have employees? Do you use an accountant? If your business is relatively small and you don't want the expense of hiring/retaining an accountant, you can file your regular 1040 form and use Schedule C to report the profit and loss for your business.

I recommend you read IRS Publication 334 Tax Guide for Small Business. They mention LLC's on page 3.

Download here: http://www.irs.gov/pub/irs-pdf/p334.pdf

Answer 7

Get an accountant. They will help you big time! I work for a small LLC, and they rely on their accountant for things like that and are not stressed about things like that so much.

Answer 8

check the internet there are multiple llc tax forms..or call the irs

Answer 9

I suggest you call the IRS an get informed or local place where you got your LLC.

Answer 10

1040

You will have to be able to itemize your business expenditures so you have to go long form.

You should get a taxman to help you understnad your taxes the first year in. You can use that return as a blueprint for all subsequent years.