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Below you will find the most common tax forms needed to report your LLC’s profit/loss.
Single Member LLC Tax Forms
This is your standard 1040 individual tax return. Because you’re a single member LLC, you can’t use a 1040-EZ, which is reserved for tax returns that don’t require the additional schedules. As a single member limited liability company, you will need to file additional schedules such as the Schedule C and Schedule E.
Schedule C (Business Income)
As a disregarded entity, your LLC doesn’t report its profit and loss in a separate filing. Instead, your business’s revenue and expenses are recorded on a Schedule C, which is attached to your Form 1040.
Schedule E (Self Employment Tax)
Self Employment tax –which is a combination of Medicare and Social Security taxes — often comes as a surprise to the newly self employed. When you work for someone else, employment taxes are split between the employee and employer. The employer pays half of the tax, and the employee pays the other half. You’re probably familiar with the employee portion of the tax. There are the withholdings labeled “FICA” and “Medicare”. You will pay FICA tax on the first $94,000 of wages and net profits from self employment. You pay Medicare taxes on all wages and net income from self employment.
Multi-Member LLC Tax Forms
Any LLC that has more than two members, will by default be taxed as a partnership. The Form 1065 is the informational tax return prepared by all partnerships.
Download Form 1065 from the IRS’s website. This form is basically a business tax return. You enter your revenue, expenses, and depending on your company’s size, additional forms related to capital accounts. Now, as a pass-through taxation entity, while the LLC files a separate tax return, it does not pay income taxes. Rather, each partner pays their share of the taxes owed (or gets to take a deduction if there are losses). The next form is used to do this.
The K-1 form is prepared along with the Form 1065. The Form 1065 tells the IRS how much total income or loss the LLC made during the tax year. The K-1 tells each member the share to the total tax that they have to pay. Each member will be sent a K-1, and the IRS gets a copy as well. The K-1 is similar in effect to the 1099.