If you’re the owner of a limited liability company (LLC), you may be wondering when your tax filing deadline is. The answer to this question depends on a few factors, including the type of LLC you have and the state in which you operate. Keep reading to find out the tax filing deadline for LLCs.
An LLC is unique in that it can be structured as either a sole proprietorship, a partnership, a multi-member LLC, or a class S or class C corporation. All of these variables can make understanding the various tax deadlines for an LLC tax return rather confusing.
It’s important to note that regardless of classification, the business should already be submitting its required estimated taxes quarterly. The annual deadline, therefore, is after the business’s tax year has ended. This is when you submit your full tax filing for the year and it can vary depending on the structure of the business.
In the next section, we’ll look into these different factors and the different deadlines for each one.
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Understanding LLC Taxation
As we mentioned, the tax filing deadline varies by the specific structure of the business. However, in general, this only changes the deadline date by one month for the various types of structures.
For businesses operating on a calendar year, this makes it easy to determine specific deadlines.
The following business structures will have their business tax deadlines on the 15th day of the fourth month following the end of the tax year.
- Sole proprietorships
- C class corporations
If the 15th day is a weekend or holiday, it simply moves to the next business day. For example, in 2023, this will be April 18th.
The following business structures will have their due date on the 15th day of the third month. So in 2023, this will be the 15th of March.
- Multi-member LLCs
- Class S corporations
It’s important to note that these dates are for those businesses on a calendar year. For those on a fiscal year, the dates will be different. Later in this article, we’ll describe the differences between calendar and fiscal years and how it relates to tax filing.
State Tax Requirements for LLCs
Businesses will also have to file their annual tax documents in the state where they reside. In general, these dates are the same as the federal deadlines and are on the 15th of the third or fourth month depending on the business structure.
However, you will always want to verify the details for your exact state as rules vary for each state and can also change from year to year. Contact the Secretary of State’s office in your state to find out the most current information and the department of revenue to contact information to learn the tax deadlines in your specific state.
For assistance, you can use this IRS table of links to find the contact information for each one of the 50 states.
Local taxes will also vary but in general these fall on the same dates as federal and state collections. But as always, check with your local municipality for specific regulations regarding taxes and deadlines.
Determine the Taxable Year of the LLC
You have probably noticed that most tax deadlines refer to the taxable year of the LLC. This can be confusing to those who are filing business taxes for the first time.
However, it’s actually simple and there are only two main options available. The business can either adhere to a calendar year or a fiscal year to determine various deadlines.
Below, we’ll explain each one.
This is the format most people are familiar with. It’s the 12-month period starting on January 1st and ending on December 31st. When most small businesses begin, they follow a calendar year.
A fiscal year is any 12-month period the business chooses with a start and end date of their choice, as long as it’s 12 months long.
You may be wondering why a business would choose a fiscal year over a calendar, and that’s a good question.
For each business, the reasons can vary, but mostly it’s to make bookkeeping easier or to have tax calculations and filing happen at a more favorable time. This can be due to seasonal fluctuations causing a business to earn more at specific times of the year. It can also be to make sure the tax deadlines are on the same day of the week every year. This is done by using a split 52/53 week period.
One more important note about choosing a calendar or fiscal year is that once determined, the business can not switch without filing a request with the IRS.
To change, you will need to use form 1128 from the IRS.
If you file your first year’s business tax forms using the calendar year, then that becomes the format for your business moving forward.
To choose a fiscal year instead, you would indicate that when applying for an EIN. The EIN form will have the option to enter your fiscal year information. Once again, this would then have to be adhered to moving forward unless you formally request a change with the IRS.
Prepare and File the LLC Tax Return
Now that you understand the various filing dates and when your annual tax year ends, you can start to prepare your LLC tax return.
Of course, this will vary greatly from business to business. With some having relatively simple returns while others may be more complex. So specific advice on how to file for each business is beyond the scope of this article.
However, there are a few key areas that everyone will follow regardless of their business or how much money it earned.
For example, there are several IRS forms that will be used depending on the structure of the LLC. Below, we’ll look at each of those forms.
IRS Form 1040
This will be used for a sole proprietorship where the income is taxed via the single owner and the LLC is mostly ignored for tax purposes. The owner reports profits and losses in the schedule C area of the 1040 form.
For many of these situations, the LLC is used for legal reasons and there are no real tax implications.
IRS Form 1065
When the LLC has multiple members and is taxed as a partnership, then form 1065 is used. Additionally, each member’s profits are listed in Schedule K-1. The individual members then file those earnings in their personal income tax returns under Schedule E.
IRS Form 8832
When an LLC is being taxed as a corporation, you will use form 8832. This type of filing is generally the most complex of all the options and will often require the help of a tax professional.
Taxing an LLC as a corporation is generally considered when the owners plan on leaving a large amount of the earnings within the business instead of taking it as a salary.
Another reason is that the business income taken from the LLC will be much larger than is usually considered a salary. In this case, it may be advantageous from a personal federal income tax perspective to have the LLC file as a corporation.
Filing an Extension on LLC Taxes
Operating a business can be full of surprises and unexpected challenges. Various issues can arise that may prevent you from being able to file your annual tax return on time.
When this happens, you are eligible to file for a tax extension. These are free to file and will push out your deadline by 6 months.
To file, use the IRS Form 7004 which can be found on the IRS website.
It’s very important to remember that this is just a filing extension and not an extension of the payment deadline. Any money owed is still owed at the original deadline. So if you pay after that date, interest may be added to the total.
What Happens When You Do Not Pay Your LLC Taxes
Not paying your LLC taxes can quickly cause the amount of money you owe to balloon due to interest and penalties. These can snowball relatively quickly and can start to put business operations in jeopardy.
When you initially miss your tax deadline, the IRS will determine what they assume you owe. Interest and penalties will begin to accrue on this amount.
The IRS will begin with a 5% per month penalty on the amount owed or is estimated to be owed. There is an additional .5% per month that is then added to the total.
Beyond just the extra money that will be owed, there may be other additional burdens placed on the business as they have to produce various documentation to answer any questions regarding the non-compliance. This can also start to put a burden on business operations.
If the missed payments continue, the IRS can also begin to place liens on certain properties and seize various assets to repay the amounts.
In some cases, criminal charges may also be brought against those who fail to pay LLC taxes.
Overall, not paying taxes is a very serious issue that can lead to complex legal issues that should be avoided.
How to Stay on Top of Your LLC Taxes
Running a business can keep you pretty busy, keeping up with taxes and deadlines can add to that. If you are looking for a simple solution to bookkeeping and filing your taxes, we can help! Our professionals can help you navigate through tax season and keep your accounting up to date with our bookkeeping service.
Do LLCs file tax returns?
Yes. LLCs must file tax returns and they will have a specific deadline for filing those returns based on their structure and whether or not they use a calendar year or a fiscal year.
When are LLC tax returns due?
LLC tax returns are generally due on the 15th day of the third or fourth month after their calendar or fiscal year has ended. The various structures possible with an LLC are what determine the exact date.
What tax returns does an LLC file?
An LLC will use either a 1040 form, a 1065 form, or an 8832 form depending on whether it is a sole proprietorship, a partnership, or a corporation.
How to prepare a LLC tax return?
To begin, it will depend on the structure of the LLC so you can determine the proper form to use and the deadline required. From there, you can follow the instructions the IRS includes with the form or contact the help of a tax professional for assistance.