By default, LLCs do not pay income tax at the entity level. Instead, the
LLC's income is passed through to the members, who must recognize their allocated
income or loss on their personal tax returns. For a single-member LLC, this income
is reported on the individual owner's Form 1040, Schedule C.
If an LLC elects to be taxed as a partnership and its fiscal year
ends on December 31, the tax return is due April 15. The LLC must file a tax return
on Form 1065 even if it does not have income or no tax is due. Amounts distributed
to members or managers are accounted for on Form 1065, Schedule K-1.
An LLC with employees is required to pay federal (and sometimes state) payroll taxes
and unemployment insurance. Furthermore, some states, including California, have
an annual LLC fee that is based loosely on the company's net income.
To learn more and speak with a representative, please call us at (888) 381-8758.
