Filing your business taxes as the owner of a Limited Liability Company, or LLC, is anything but simple; the process can be both complicated and longwinded. While it isn’t all that different from filing personal taxes, there are some major nuances that depend on such factors as how the LLC is classified in terms of taxes. The default status for LLCs is a sole proprietorship for those businesses with one owner, or if there are more than one owner, a partnership.
Working with a service providing tax preparation in Coral Gables is the most convenient and effective way to ensure that your records are up-to-date and accurate, and that you understand your tax category. Once you’ve got a handle on these two things, you should be able to manage your LLC taxes.
Let’s look in a little more detail at a few key aspects of tax filing for LLCs:
Business taxes and personal taxes
If your LLC is treated by the IRS as a sole proprietorship, then both your business and your personal taxes are filed together, using Schedule C. but if your LLC is treated by the IRS as a corporation or partnership, your business taxes must be filed separately using forms 1065 or 1120.
Filing your LLC taxes
- As mentioned above, you must firstly determine the tax status of your LLC.
- Then you must gather all necessary financial records, such as expense reports, receipts and income statements.
- Select the right form for filing according to your tax status
- With your financial records, complete the necessary forms, making sure to list all income and deductible expenses
- Once you’ve reported your expenses and income, you can calculate the amount of tax you owe, or the refund you’re due.
- File your taxes by mail, or electronically before the business tax deadline of 15th March, or 15th April for personal taxes.
Seeking help from a tax accountant
It’s highly recommended that you seek professional guidance and support from a tax accountant who has specialist industry and region-specific knowledge. Their personalized advice can be immensely beneficial when dealing with LLC taxes.
Credits and deductions
From vehicle use and home office expenses, to retirement contributions and equipment purchases, knowing how to maximize your credits and deductions can help you save significantly on your taxes.
Deadlines and penalties
Knowing your tax deadline is crucial if you want to avoid a hefty penalty from the IRS. While extensions are available, they don’t extend the payment you’re due to make, only the deadline by which you must file.
State taxes
Depending on your location, your LLC may be subject to both federal and state taxes, and having a local tax specialist to assist you, can keep you on track, up-to-date, and compliant with your taxes at all times.
Record keeping
You must try to keep clear and updated records of all income, asset purchases, expenses and employment taxes. Hiring a bookkeeping service alongside a tax accountant, can save you time and eliminate errors when your taxes are due.
While this brief guide gives you an outline of tax filing for an LLC, consulting with accountants in Coral Gables will ensure that you’re tax-ready, every year. With complicated tax laws that are always subject to change, there can be no second-guessing when it comes to accurate filing that keeps the IRS happy, and lowers your tax liability. If you can find a tax accountant with experience in your particular industry or niche, so much the better, but ultimately, any professional help is better for your business than going it alone when it comes to taxes.