LLCs have the unique ability to be taxed in many ways, and each taxation status has a set of rules for business tax filings.ĭon’t forget about state tax filings. Whether you’re legally required to file business taxes with no income depends on how your LLC is taxed. Absent any business activity, you might be able to skip filing your federal LLC tax return, but remember to file your personal tax return when you earn income. You must always file your LLC taxes when you have business activity: revenues, deductions, and credits. It’s not required in every case, but you should expect to file your LLC taxes every year that your business exists, even if you have little to no business activity.ĭo I have to file taxes for an LLC with no income? An LLC may be eligible for late election relief in certain circumstances. See About Form 8832, Entity Classification Election for more information.After you hit the “pause” button on your business, it might seem counterintuitive to file a business tax return. Generally, an election specifying an LLC’s classification cannot take effect more than 75 days prior to the date the election is filed, nor can it take effect later than 12 months after the date the election is filed. Effective Date of ElectionĪn LLC that does not want to accept its default federal tax classification, or that wishes to change its classification, uses Form 8832, Entity Classification Election PDF, to elect how it will be classified for federal tax purposes.

However, for purposes of employment tax and certain excise taxes, an LLC with only one member is still considered a separate entity. For income tax purposes, an LLC with only one member is treated as an entity disregarded as separate from its owner, unless it files Form 8832 and elects to be treated as a corporation. Specifically, a domestic LLC with at least two members is classified as a partnership for federal income tax purposes unless it files Form 8832 and affirmatively elects to be treated as a corporation. Classificationsĭepending on elections made by the LLC and the number of members, the IRS will treat an LLC as either a corporation, partnership, or as part of the LLC’s owner’s tax return (a “disregarded entity”). There are special rules for foreign LLCs. Check your state’s requirements and the federal tax regulations for further information. Most states also permit “single-member” LLCs, those having only one owner.Ī few types of businesses generally cannot be LLCs, such as banks and insurance companies. Most states do not restrict ownership, so members may include individuals, corporations, other LLCs and foreign entities. Each state may use different regulations, you should check with your state if you are interested in starting a Limited Liability Company.

A Limited Liability Company (LLC) is a business structure allowed by state statute.

Taxes for small business llc