---
title: "How does an LLC file taxes? | Ledgerbrook"
source: https://ledgerbrook.com/blog/how-an-llc-files-taxes/
description: "How an LLC files taxes by tax status: Schedule C, Form 1065, 1120-S or 1120, filing with no income, and what the books need."
---

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# How does an LLC file taxes?

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[Omkar Moraye](/about/) · October 28, 2026

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## How does an LLC file taxes?

An LLC files according to its tax status, not its legal form. A single-member LLC reports on Schedule C with the owner's Form 1040, due April 15. A multi-member LLC files Form 1065 by March 15 and sends each member a K-1. An LLC that elected S corp status files Form 1120-S by March 15.

How does an LLC file taxes? The IRS does not have an LLC tax return. A limited liability company is a creature of state law, and for federal income tax the IRS slots it into one of the categories it already has: part of the owner’s personal return, a partnership, or a corporation. Which one depends on how many members the LLC has and whether it filed an election, and that one fact decides the form, the due date, who signs, and what the books have to produce.

Most of the questions owners ask about LLC taxes (“do I file LLC and personal taxes together?”, “do I file if the LLC made no money?”) have a different answer for each category. This post goes through them one at a time, for the 2026 tax year, with each rule cited to the IRS. Ledgerbrook keeps books and does not prepare returns; the return itself is your preparer’s job, and state rules differ.

## How the IRS classifies an LLC

The IRS’s own summary is short. By default, “a domestic LLC with at least two members is classified as a partnership for federal income tax purposes,” and an LLC with one member “is treated as an entity disregarded as separate from its owner” ([IRS: Limited liability company](https://www.irs.gov/businesses/small-businesses-self-employed/limited-liability-company-llc)). Either default can be changed:

- **Form 8832** elects to have the LLC taxed as a corporation. The election cannot take effect more than 75 days before it is filed or more than 12 months after.
- **Form 2553** elects S corporation status. An LLC that meets the tests in the [Form 2553 instructions](https://www.irs.gov/instructions/i2553) “will be treated as a corporation as of the effective date of the S corporation election and doesn’t need to file Form 8832.”

So there are four ways an LLC can be taxed, and the rest of this post follows them.

## Which return each LLC files

| How the LLC is taxed | Federal return | Due for 2026 | Signed by | Goes to the owners |
| --- | --- | --- | --- | --- |
| Single-member, no election (disregarded) | Schedule C with the owner’s Form 1040; Schedule SE for self-employment tax | Apr 15, 2027 | The owner | Nothing: the owner is the filer |
| Two or more members, no election (partnership) | Form 1065 | Mar 15, 2027 | Any partner or LLC member | A Schedule K-1 per member |
| Elected S corporation (Form 2553) | Form 1120-S | Mar 15, 2027 | A corporate officer, such as the president or treasurer | A Schedule K-1 per shareholder |
| Elected C corporation (Form 8832) | Form 1120 | Apr 15, 2027 | A corporate officer | A 1099-DIV for any dividends |

Sources: [Instructions for Form 1065](https://www.irs.gov/instructions/i1065) (2025), which say a 1065 “isn’t considered to be a return unless it’s signed by a partner or LLC member”; [Instructions for Form 1120-S](https://www.irs.gov/instructions/i1120s) (2025); [Instructions for Form 1120](https://www.irs.gov/instructions/i1120) (2025). The 2027 dates assume a calendar tax year. Extensions, extended dates and the penalty table for each return are in [business tax deadlines](/blog/business-tax-deadlines/).

A single-member LLC whose activity is rental property reports on Schedule E instead of Schedule C, and a farm on Schedule F ([IRS: Single member limited liability companies](https://www.irs.gov/businesses/small-businesses-self-employed/single-member-limited-liability-companies)).

Filing season is close and the LLC's books are not done?

That is a cleanup, not a one-off fix: $99 per month of backlog (20% off 6+ months), one fixed price agreed before any work starts. [Send the file for a free 48-hour review](/contact/?from=blog%2Fhow-an-llc-files-taxes).

## Single-member LLC: the owner’s return

### Do you file LLC and personal taxes together?

Yes, for a single-member LLC with no election. The LLC’s income and expenses go on Schedule C, which is attached to the owner’s Form 1040, and the owner pays income tax and self-employment tax on the profit whether or not any of it was withdrawn. There is no separate federal income tax return for the LLC.

Self-employment tax is 15.3%: 12.4% for Social Security and 2.9% for Medicare. Schedule SE is required once net earnings from self-employment reach $400 ([IRS: Self-employment tax](https://www.irs.gov/businesses/small-businesses-self-employed/self-employment-tax-social-security-and-medicare-taxes)). The Social Security part stops at the year’s wage base, which is $184,500 for 2026.

### Where the single-member LLC is still separate

The LLC is disregarded for income tax but not for everything. The IRS treats a single-member LLC “as a separate entity for purposes of employment tax and certain excise taxes.” If it has employees, it files 941s and W-2s under its own employer identification number, not the owner’s Social Security number.

A married couple who own an LLC together normally have a two-member LLC and a partnership return. In a community property state, the IRS lets a married couple who own the LLC as community property choose either partnership or disregarded treatment ([Rev. Proc. 2002-69](https://www.irs.gov/pub/irs-drop/rp-02-69.pdf)). Ask your preparer before relying on that; it does not apply in common-law states.

### What the books must produce

A Schedule C needs a profit and loss for the calendar year, sorted into its expense lines: advertising, car and truck expenses, contract labor, insurance, supplies and so on. The mapping from a chart of accounts to those lines is in [Schedule C expense categories](/blog/schedule-c-expense-categories/). Owner draws and owner investments are equity, never expenses, so a P&L with the owner’s transfers in it overstates or understates the profit the owner is taxed on.

## Multi-member LLC: Form 1065 and the K-1s

A multi-member LLC files Form 1065 by the 15th day of the 3rd month after its tax year ends, which is March 15, 2027 for 2026. The partnership pays no federal income tax itself. Each member’s share of income, deductions and credits goes on a Schedule K-1, and each member reports their K-1 on their own Form 1040.

That is why the books for a multi-member LLC carry more than a profit and loss:

- **A capital account per member.** Item L of the K-1 reports each member’s capital account for the year: beginning balance, contributions, share of income, withdrawals and distributions, and ending balance. One shared draw account cannot produce it.
- **A balance sheet that reconciles.** Schedule L on the 1065 is a beginning and end-of-year balance sheet, and it is optional only when the partnership answers yes to Schedule B question 4, which requires, among other conditions, total receipts under $250,000 and total assets under $1 million.
- **Guaranteed payments, kept apart.** Payments to a member for services, fixed without regard to profit, are reported separately on the 1065 and the K-1. They are not wages: the IRS does not treat partners as employees of their partnership (Rev. Rul. 69-184), so members of an LLC taxed as a partnership are not paid through payroll.

How those accounts are set up month to month is in [bookkeeping for an LLC](/blog/bookkeeping-for-llc/). Partner withdrawals are in [partnership draws](/blog/partnership-draw/).

### The late-filing penalty owners do not expect

A late 1065 costs money even when the partnership owes no tax. For returns required to be filed in 2026, the penalty was $255 per member for each month or part of a month the return is late, up to 12 months (Instructions for Form 1065, 2025). The amount is adjusted for inflation each year.

| Members | Months late | Penalty |
| --- | --- | --- |
| 2 | 1 | $510 |
| 2 | 5 | $2,550 |
| 3 | 12 | $9,180 |

The penalty can be waived for reasonable cause, and the IRS has a first-time abatement policy; both are your preparer’s call. The cheaper path is a Form 7004 extension filed by March 15.

## LLC taxed as an S corporation or a C corporation

### S corporation: Form 1120-S

An LLC with an accepted Form 2553 files Form 1120-S for each year the election remains in effect, by March 15, 2027 for 2026. Like a partnership, the S corporation passes income through on K-1s, and shareholders are taxed on their share “whether or not it is distributed to them.” Unlike partnership income, S corporation income “isn’t self-employment income” (Instructions for Form 1120-S, 2025). That difference is the reason owners elect, and it is also why the IRS expects a working owner to take a reasonable salary through payroll; see [S corp reasonable salary](/blog/s-corp-reasonable-salary/).

The late-filing penalty works like the partnership one: $255 per shareholder per month for returns required to be filed in 2026, up to 12 months, plus 5% a month of any tax due, up to 25% of the unpaid tax.

For the books, the election adds owner payroll, shareholder distributions and shareholder basis. Those accounts are in [S corp bookkeeping](/blog/s-corp-bookkeeping/), and the switch-over from a single-member LLC is in [S corp election bookkeeping](/blog/s-corp-election-bookkeeping/).

### C corporation: Form 1120

An LLC that elected corporate classification on Form 8832 and did not elect S status files Form 1120 by the 15th day of the 4th month, April 15, 2027 for a calendar year. It pays the 21% corporate income tax itself, and the owners are taxed again on any dividends. Corporations “must file an income tax return whether or not they have taxable income” (Instructions for Form 1120, 2025).

## Do you file taxes if the LLC made no money?

This is where the four categories differ most. The common answer, “an LLC always files,” is not what the IRS instructions say for partnerships.

| How the LLC is taxed | No income for the year | Source |
| --- | --- | --- |
| Single-member, disregarded | Nothing to report for the LLC if it had no income and no expenses. If it had expenses, a Schedule C shows the loss. The owner’s own Form 1040 filing requirement is separate. | IRS single-member LLC page |
| Partnership | Must file Form 1065 unless it “neither receives income nor incurs any expenditures treated as deductions or credits.” A year with no income but some expenses still needs a 1065. | Instructions for Form 1065 |
| S corporation | Files Form 1120-S for every year the election remains in effect, with or without income. | Instructions for Form 1120-S |
| C corporation | Files Form 1120 whether or not it has taxable income. | Instructions for Form 1120 |

In practice, a multi-member LLC that paid even a state filing fee, a registered agent or a website subscription has deductions and files a 1065. The exception covers an LLC that truly did nothing, and since the late-filing penalty runs per member per month, most preparers file a zero return rather than test it.

A single-member LLC with expenses and no revenue is usually worth reporting anyway. The loss from a business the owner is actively running can reduce the owner’s other income, subject to the at-risk, passive activity and excess business loss limits.

### State taxes do not stop at zero either

Many states charge an annual LLC tax or fee regardless of income. California is the usual example: “Every LLC that is doing business or organized in California must pay an annual tax of $800,” and “this yearly tax will be due, even if you are not conducting business, until you cancel your LLC” ([California Franchise Tax Board](https://www.ftb.ca.gov/file/business/types/limited-liability-company/index.html), read October 28, 2026). Check your own state’s annual report and franchise tax rules, and dissolve an LLC formally if it is no longer used.

## How to file quarterly taxes for an LLC

The LLC rarely makes estimated payments itself. In the three pass-through categories, the owners pay estimated tax on their own share of the profit, using Form 1040-ES. The IRS rule: individuals, “including sole proprietors, partners, and S corporation shareholders,” generally pay estimated tax if they expect to owe $1,000 or more when they file. A corporation generally pays if it expects to owe $500 or more ([IRS: Estimated taxes](https://www.irs.gov/businesses/small-businesses-self-employed/estimated-taxes)).

The penalty is generally avoided by paying at least 90% of the current year’s tax or 100% of the prior year’s, whichever is smaller; higher-income owners have a higher prior-year percentage. The [quarterly estimated tax calculator](/tools/quarterly-estimated-tax-calculator/) applies both rules to the LLC’s profit. The last 2026 payment is due January 15, 2027, and the 2027 calendar is in [business tax deadlines](/blog/business-tax-deadlines/).

When the payments come out of the LLC’s bank account, they are the owner’s tax, not a business expense. They go to the owner’s draw or distribution account; the entry for each entity type is in [estimated tax payments in QuickBooks Online](/fixes/estimated-tax-payments/).

## What every LLC return starts from

Whichever form the LLC files, the preparer starts from the same thing: a closed year in the books. That means every bank and card account reconciled to its December statement, income and expenses categorized, owner money in equity, and, for partnerships and S corporations, a balance sheet that ties out.

| Return | The books must produce |
| --- | --- |
| Schedule C | A calendar-year P&L mapped to Schedule C lines; vehicle mileage; asset purchases for depreciation |
| Form 1065 | P&L, balance sheet, capital account per member, guaranteed payments by member |
| Form 1120-S | P&L, balance sheet, officer wages tied to the W-2s, distributions by shareholder, data for shareholder basis |
| Form 1120 | P&L, balance sheet, dividends paid, income tax payable |

What to hand over, and in what form, is in [what your CPA needs at year end](/blog/what-your-cpa-needs-at-year-end/).

## Common questions about LLC taxes

### Does an LLC file a tax return?

A multi-member LLC, an S corporation LLC and a C corporation LLC each file their own federal return: Form 1065, 1120-S or 1120. A single-member LLC with no election does not; its activity goes on the owner’s Form 1040.

### How much do you have to make with an LLC to file taxes?

There is no income floor for the entity returns: a partnership files once it has any income or deductible expense, and a corporation files every year. For a single-member LLC, the owner must file Schedule SE once net earnings from self-employment reach $400.

### What is the best way to file taxes for an LLC?

Pick the tax status first, then the filing method. A single-member LLC with simple books can be reported on Schedule C with consumer tax software. A Form 1065 or 1120-S involves K-1s, capital accounts and a balance sheet, and most owners use a preparer for those.

### Do LLC owners pay taxes twice?

Not by default. Single-member and partnership LLCs pay one layer of income tax, at the owner level. Only an LLC that elected C corporation status pays corporate tax and then has its owners taxed again on dividends.

### What happens if you start an LLC and do nothing?

At the federal level, a single-member LLC has nothing to report, and a partnership with no income and no deductible expenses has no 1065 to file. A corporation-taxed LLC still files. The state usually still expects an annual report and any minimum tax until the LLC is dissolved.

## When the books are not ready at filing time

Most late LLC returns are not late because of the form. They are late because the books behind them were never finished: months of unreconciled bank activity, personal spending mixed into expenses, and no capital accounts for the members. The return can be extended; the books still have to be built. Catch-up bookkeeping rebuilds the missing months from bank and card statements, closes the year, and hands the preparer the reports in the table above.

$99per month of backlog20% off 6+ months

> **When to hand this off:** if the LLC’s books for 2026 are more than three months behind, or a multi-member LLC has no capital account per member, the return depends on work that is not done yet. A [free file review](/contact/?from=blog%2Fhow-an-llc-files-taxes) says how far behind the books are and prices the catch-up before work begins. Scope and turnaround are on the [catch-up bookkeeping](/quickbooks-catch-up-bookkeeping/) page.

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