how much does it cost to file taxes for llc [Must-Know Tips]

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Last updated : Aug 9, 2022
Written by : Etta Klaers
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how much does it cost to file taxes for llc

Comment by Angeles Mayou

hey guys this is robert with malaya law we help entrepreneurs just like you start their businesses without dealing with the complicated legal forms we are also the number one highest rated business law firm for entrepreneurs with more than 1 500 five-star google reviews today we are going to talk about whether you need to file a tax return for your llc if you are not conducting business that year so i'm sure many of you guys have started an llc and realized that you have a lot of work to do before you can collect payments or make money and when this happens you are likely wondering whether you have to file a tax return even though your business made no money that year first i would like to inform you though that i am not an accountant and this is not accounting advice you should reach out to a to an accountant or a professional to get your tax questions answered and what i say in this video is very general information and may not apply to your particular situation but with that being said it is possible that your llc will still be required to file a tax return even though it was inactive that year or did not make any money that year so ultimately it all depends on whether your llc was taxed as a partnership a disregarded entity or a corporation so it basically all boils down to how your llc is being taxed so if your llc is a disregarded entity then you are required to report any income on your personal tax return and there is likely little to no extra filings that you have to do other than your regular personal tax return the llc's income and expenses are reported as self-employment income on the schedule c of the llc member's personal tax return you will be required to file this schedule c if your llc made more than four hundred dollars for the year if you made less than four hundred dollars and you do not have any expenses that you would like to deduct then you will not have to file a schedule c however if the llc has more than one member then the llc will automatically treat it as a partnership or instead of being taxed as a partnership you may elect for it to be taxed as a corporation so check your documents to see how your multi-member llc was registered and taxed if the llc was formed and it was automatically designated as a partnership then the llc will have to file a partnership tax return regardless of how much money you made additionally each member of the llc will have to also report the income on his personal tax returns so ultimately the llc must file a partnership tax return on tax form 1065 unless it did not receive any income that year and you do not have any expenses that you plan to write off or claim as a deduction or credit so in summary if your llc was taxed as a partnership and made no money and did not have any expenses that you plan on writing off then the llc probably does not have to file a partnership tax return now if your llc filed form 8832 with the irs which is the document that you must file to have the llc taxed as a as a corporation then the llc is required to file a tax return even if it made no money and no business was engaged in so overall it is likely that you will have to file a tax return or deal with something related to taxes even if your llc did not make money that year and despite having little to no income i always recommend that you speak to a tax professional who can advise you and handle your taxes for you so uh yeah i understand that starting a business can be challenging and many entrepreneurs let the fear stop them from continuing or moving forward but don't let that be you click on the link below to schedule a free consultation with us to discuss your legal needs and while i can't give you tax advice i can provide you with legal advice on how to start your us business and i can put you in contact with other professionals who can help you if i'm not able to do so so click on the link below to schedule a free consultation with me or my team and we will be able to help you grow your business and launch your us business without having to deal with the complicated legal forms and yes so go ahead and click the link below and also if you have any questions just post them in the comments below and my team and i will try to get to them as soon as we can see you guys in the next video bye-bye

Thanks for your comment Angeles Mayou, have a nice day.
- Etta Klaers, Staff Member

Comment by Jeffery

okay how to file your taxes as an llc owner let's discuss it now in order to do this we have to break this video down into two sections because you have the single member llc and then you have the multi-member llc and although they are both limited liability companies or llcs the tax returns are prepared and filed a little bit differently and i want to make sure that you are filing your taxes correctly in 2022 so today i'll be going over what tax returns you need to file as an llc owner what you need to record and what you need to put in your tax return how to pay your current and future taxes and any tips and faqs along the way so you stay out of trouble with the irs so if all that sounds good to you make sure you like this video while the intro plays hey there and welcome to our channel i'm sean with life accounting the accounting firm that is dedicated to helping you save on taxes and building more wealth and also i want to say thank you to everyone who has been subscribing and joining our channel we really appreciate the support and it gives us the positive reinforcement to continue making youtube videos alright so step number one what tax return do you need to file as an llc owner well as i mentioned it depends on what type of llc you have let's go over all three so you have a single member llc which means you are the sole owner of your limited liability company and you have no partners that means you will need to file your taxes using forms schedule c and schedule se and that can be found on the us 1040 the individual income tax return now the schedule c portion is used to report the income and expenses you incurred as a part of your business schedule se is also required to be included with your tax return as a single member llc because it is used to calculate your self-employment tax liability and schedule se stands for self-employment now i'll break down exactly what goes on as schedule c in just a second but before we do let's talk about the multi-member llc now if you have a multi-member llc that means you have at least one other partner in your business so there are at least two llc members if that's you then what you guys need to do is file u.s form 1065 the partnership return of income okay this form allows you to clearly allocate the portion of income and losses to each partner hey sean look i can split my profits with myself okay kind of like that now this form must be filed by the business tax deadline which is usually march 15th now there are about three pages on the 1065 forum which covers all your income and expenses as well now lastly if you have an llc regardless of if it is a single member llc or a multi-member llc and you have elected to be taxed as an s-corporation which by the way being taxed as an s-corporation allows you to eliminate some of the self-employment tax which is great for businesses who are making at least seventy thousand dollars in net income anyway llcs who have been elected to be taxed as an s corporation need to file us form 1120s the income return for s corporations and this form mainly ensures that owner employees are paying themselves a reasonable salary and calculate the distributions earned from the company this tax return also must be filed by the business tax deadline which is usually march 15th now llc partnerships in s corporations still need to file a normal 1040 form for their individual tax purposes as well alright so now that you know which tax forms you need to file let's move into number two what you need to record on your tax return now the tax code and the irs are very simple okay they want to know who you are and they want to know what integrity might i add how much money you made and what percentage of that should be allocated towards your taxes and that's the case for every business regardless of which tax return you need to file which by the way if you need professional assistance with tax planning and tax preparation then consider working with our team there will be a link in the description below where you can sign up for more information so the next step step number two for every llc owner is to record information about you and your business on your tax return you're gonna need to record stuff like your business name your business address your business ein number your principal business or profession like what you sell your principal business code or activity code your accounting method if you materially participated in the operations of the business if you just started or acquired the business and if you needed to file any 1099 forms as well as any other important information about your business the irs will ask you additional questions so they know everything there is to know after that then you can move into step number three and look at the next section on the schedule c general partnership form an 1120s tax form which is income reporting in this section the irs wants to figure out what your gross income was for your business now you may receive one or multiple 1099 miscellaneous forms or 1099 net forms to report exactly how much income you made and if you had a lot of online sales then you may also receive a 1099k form to report your income with as well hey sean look i'm reporting all my income forms okay kind of like that now once you have all your income reported then it's time to move on to step number three record your qualified business expenses now most platforms and companies make it pretty easy to find out what your gross income was for the year but expenses well not so much okay it's up to you to make sure you are tracking or bookkeeping all your expenses throughout the tax year now once you have all your expenses and transactions categorized and organized then you can move on to step number four and start recording your expenses on your tax return okay you're going to want to record any asset purchases that you made throughout the tax year any direct qualified expenses you spent money on such as advertising fees meals employee benefits etc and if you had cost of goods so you want to make sure you complete that section as well as well as any vehicle expenses you may have incurred as well now once you have listed all your qualified expenses or tax deductions or tax write-offs then you will arrive at your net income which will determine your total taxable income what tax bracket you fall into and what taxes you need to pay if you haven't already done so and all of that is calculated pretty quickly when you file on the 1040 form with a schedule c after that then you can move into step number five which is to go ahead and record any other individual activity on your tax return and then file your taxes however if you completed step number four within a 1065 partnership tax return or an 1120s tax return then step number five is for you to obtain your k1 document okay this k1 document is used to distribute each partnership share of current income deductions credits and other special items on their tax return so basically you need to file your 1065 or your 1120s again by the business tax deadline which is usually march 15 and then file your k1 document on your

Thanks Jeffery your participation is very much appreciated
- Etta Klaers

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