how to file taxes for llc in illinois search [Must-Know Tips]

Last updated : Aug 7, 2022

Write a comment

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 for your comment Pauletta Mikler, have a nice day.
- Marcel Scheppke, Staff Member

are you wondering how to start an LLC in Illinois today you will learn about the most common ways to start your business including the correct forms you'll need how to register your LLC critical naming requirements and all other vital tips and tricks then as a bonus later in the video I will reveal a trustworthy registered agent who will help set up your LLC for free so make sure to stick with me until the end the state of Illinois like other states has several specific LLC requirements there are three main ways you can start an LLC in Illinois first is the DIY or do-it-yourself process where you mostly depend on Illinois State's website the second way is hiring a professional service that practically offers more efficiency and Security in the process of creating your LLC while the third one is hiring an attorney we will skip the attorney hiring portion because that's expensive and most business owners won't need that service first let's take a look at the steps required for starting an LLC on your own Step 1 choose a name for your Illinois LLC your llc's name must be recognizably different from the names of other business entities already on file with the Illinois Secretary of State you can check to see if a name is available by searching the Secretary of State Business Services name database you can reserve a name for up to 90 days by filing an application to reserve a name form LLC 1.15 the filing fee is 25 dollars under Illinois Law an LLC name must contain as the last words limited liability company LLC or LLC the abbreviations limited and Company are not allowed in Illinois the name must also not include the words Corporation Corp Incorporated and limited company limited partnership or LP Step 2 Illinois requires LLC to have a registered agent every Illinois LLC must have an agent for service of process in the state this is an individual or business entity that agrees to accept legal papers on the llc's behalf if someone sues the company a registered agent can be an individual who resides in Illinois or a domestic or foreign corporation authorized to do business in Illinois if it's a corporation its articles must authorize it to act as an agent the registered agent must have a physical street address in Illinois step 3 file articles of organization with the Illinois Secretary of State after that you must file the certificate of formation with the Illinois Secretary of State's business entities Division and the office of the judge of probate to officially incorporate a domestic Illinois limited liability company the Illinois State filing cost for LLCs is one hundred and fifty dollars for both domestic llc's and for foreign LLCs basically a domestic LLC means that you are already a resident of Illinois and you want to build a business in Illinois foreign LLC on the other hand is for people living outside Illinois but wanting to start a business or a franchise of their business in Illinois with that said most businesses would be applying for a domestic LLC you can file the certificate of formation online or by mailing it to the Secretary of State expect the LLC certification process to take approximately two weeks this is three to four days for the judge of probate and 10 days for the Secretary of State step 4 prepare an operating agreement now an operating agreement is a good idea to have in place with the other members if your LLC has more than one member although a limited liability company operating agreement is not necessary for Illinois your operating agreement should clarify how your company or business will handle big picture issues such as allocating earnings and losses and dissolving the company your operating agreement should also cover the transfer of membership interest profits or losses and distributions initial Investments decision-making Powers voting rights and management and lastly dissolving the business step 5 of file annual reports with the Illinois Secretary of State all llc's doing business in Illinois must file an annual report with the secretary of state the report is due each year prior to the first day of the llc's anniversary month the month in which it was organized for example if your LLC was created on July 15th then your report would be due by July 1st you can file the report online or by mail with form LLC to 50.1 the filing fee is 75 dollars filing a report late more than 60 days after the due date incurs an additional 100 penalty step 6 obtain an EIN an EIN or employer identification number is a federal tax ID issued by the IRS your EIN is used by them to readily identify your firm and tax filings all Illinois firms pay a business privilege tax and the state requires you to have an EIN to file you may also be required to provide your EIN when opening a bank account or applying for municipal permits or licenses obtaining an EIN is a slightly longer process compared to their previous steps I'm sure you know anything to do with the IRS is confusing first you have to have complete knowledge of your LLC such as your company information managing member information business address business information company details and even critical information regarding vehicular assets and federal excise taxes this is another reason why getting a professional registered agent is way more convenient as they can do this for you as part of their service now let's talk about the second option to form an LLC and that is hiring a professional formation service professional formation services do all the steps you should be doing on your own from filing necessary forms to acting as your registered agent you usually have to allocate a specific budget for this option as I already mentioned earlier Inc file is one of the best companies out there to help you form your LLC you can click on the link in the description to get access to this deal Inc file is one of a kind as it offers a free package with services such as preparing and filing your articles of organization well you still have to pay 237 dollars for the state fees which you would have to do anyway if you chose the DIY option but looking at the bigger picture all other companies will still charge their service fee on top of State filing fees Inc file does not collect this fee this plan already includes a free registered agent for your first year of subscription and 119 annually moving forward if you decide to continue the service after the first year Inc file's next packages are the gold and platinum packages which both have package fees already on top of the 237 dollar State fee each package has its own set of services which are all worthy of the subscription you are paying for the gold package offers you the benefits of filing reports and taxes for your LLC every year USA LLCs are required to file a state annual report this report is essentially an information update of your file so that the state knows who is now in charge and how to contact your company USA LLCs are also required to file state tax returns to make matters even more complicated your annual report and business privilege tax share a document and are due at the same time each year with the ink files

Thanks Lorina your participation is very much appreciated
- Marcel Scheppke

About the author

Marcel Scheppke

I've studied ballistics at Corban University in Salem and I am an expert in data management. I usually feel groggy. My previous job was occupational safety & health inspector I held this position for 20 years, I love talking about auto racing and yodeling. Huge fan of Susan Rice I practice wakeboarding and collect rocks.