Limited Liability Companies (LLCs) represent a distinctive business structure favored by many small business owners. Renowned for affording owners protection against business debts, they also offer flexibility regarding tax filing and payment procedures.
Given the flexibility inherent in LLCs, there isn’t a fixed tax deadline. Instead, the timing of tax filing for LLCs depends on several factors. Keep reading to determine your LLC’s tax deadline for 2024.
How to File LLC Taxes?
LLCs stand out due to their state-level formation. When opting for LLC status, your state recognizes your business as a corporation. However, for the IRS, your LLC remains a sole proprietorship if owned by one individual or a partnership if there are multiple owners.
Both sole proprietorships and partnerships are classified as disregarded or pass-through entities, as profits flow through to owners for reporting on personal tax returns. In essence, these entities do not pay corporate income tax. By filing under one of these designations, LLCs enjoy the liability protection of corporations while sidestepping double taxation.
However, LLCs aren’t limited to filing as sole proprietorships or partnerships. They can also elect to file as an S corporation or C corporation.
The decision on which option to choose hinges on various factors. For instance, opting for corporate filing may lead to savings on self-employment taxes but entails more rigorous reporting requirements.
When determining the most suitable filing option for your LLC, consulting with a CPA or tax professional is advisable. With a premium PVM Accounting subscription, you gain access to consultations with tax professionals to thoroughly explore your options.
Primary Filing LLC Tax Deadlines
For most tax forms, the filing deadline is the 15th day of the month. In cases where this date falls on a weekend or holiday, the deadline shifts to the next business day. Rest assured, the IRS ensures you have ample time to file your taxes.
Your specific filing date also hinges on whether you choose a different fiscal year. By default, businesses operate on a calendar year basis, closing their books on December 31. Utilizing the calendar year can simplify matters, aligning your business taxes with your personal taxes. However, opting for an alternative fiscal year can be advantageous for seasonal businesses, such as farms or schools, allowing them to conduct tax activities after their peak business period.
If you maintain the default calendar year fiscal cycle, your filing month is determined by the IRS’s classification of your business. There are four potential filing types for your LLC, each with its own designated due date.
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Sole ProprietorshipÂ
If your LLC is owned by a single individual, the IRS treats it as a sole proprietorship. You report your business income by completing Schedule C, which is included in IRS Form 1040, your personal income tax return. Consequently, you’ll file your business taxes simultaneously with your personal income taxes.
For the 2023 tax year, to be filed in 2024, LLCs classified as sole proprietors must submit Form 1040 by April 15th, unless an extension is obtained. With an extension, the filing deadline extends to October 15th.
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PartnershipÂ
If your LLC has multiple owners, the IRS classifies it as a partnership. In this scenario, you’re required to complete IRS Form 1065, the partnership return. Form 1065 is where you report the business’s income and expenses for the year. It’s important to note that the business itself does not pay taxes; instead, the responsibility falls on the business owners.
As part of Form 1065, the LLC (or the entity filing on its behalf) provides each shareholder with a Schedule K-1. This document contains all the necessary information from the Income and Expenses section of Form 1065. Shareholders then use Schedule K-1 to file their personal income tax returns and pay any partnership taxes.
For the 2024 tax year, LLCs operating as partnerships must file Form 1065 by March 15th, unless an extension is obtained. With an extension, the filing deadline is extended to September 15th. Shareholders are required to submit their Schedule K-1 as part of their personal income tax return by April 15th.
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S CorporationÂ
If your LLC filed Form 2553 within the specified timeframe for the fiscal year being filed, the IRS designates it as an S corporation. S corporations are considered pass-through entities, which means that the business’s profit or loss is reported by shareholders on their personal income tax returns. To report your business’s income and expenses, you’ll need to complete IRS Form 1120S.
Similar to partnerships, Schedule K-1 must be prepared as part of Form 1120S to report each shareholder’s share of income.
For the 2024 tax year, LLCs operating as S corporations must file Form 1120S by March 15th, unless an extension is obtained. With an extension, the filing deadline extends to September 15th. Shareholders are required to submit their Schedule K-1 as part of their personal income tax return by April 15th.
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C Corporation
If your LLC elected to be treated as a corporation by filing Form 8832 (further details on this below), the IRS considers it a C corporation. C corporations are subject to a concept known as double taxation. This means that the business pays a flat corporate federal income tax, and then shareholders are taxed again on their earnings when filing their personal income taxes, resulting in double tax payments.
For C corporation income tax returns, IRS Form 1120 is utilized. The taxable income of C corporations is subject to a flat federal corporate income tax rate of 21%. Additionally, state corporate income taxes typically range from 1% to 12%, although some states do not impose an income tax. It’s worth noting that state corporate income taxes are deductible expenses for federal income tax purposes.
For the 2024 tax year, LLCs opting for C corporation status must file Form 1120 by April 15th, unless an extension is obtained. With an extension, the filing deadline extends to October 15th.
How PVM Accounting Can Assist You
Staying abreast of tax deadlines is the initial stride toward mastering your tax filing process. However, dedicating the extensive time required to achieve mastery might not be feasible for you.
With PVM Accounting’s comprehensive monthly bookkeeping services, you’re positioned to tackle tax obligations seamlessly from the outset to year-end. Upon finalizing your financial records, we furnish you with a year-end financial package containing all pertinent information essential for tax filing. By upgrading your subscription, we extend our support to include tax filing services. Additionally, gain access to consultations with a tax professional, empowering you to navigate tax decisions for your business with confidence.
Quarterly Estimated Taxes
Self-employed individuals and corporations have the option to spread out their tax payments throughout the year. For owners of sole proprietorships, partnerships, and S corporations, making quarterly estimated income tax payments is mandatory if they anticipate owing over $1,000 in taxes for the year. For C corporations, this threshold is lowered to over $500 in taxes for the year. Even businesses in their inaugural year must adhere to quarterly tax filing if they project to surpass these benchmarks.
These tax payments are considered “estimated” because they are based on a forecast of your anticipated earnings for the tax year. Overpayments result in either a refund or credit toward future tax payments, while underpayments require settling the difference after filing your return.
A fiscal year comprises four quarterly estimated tax payments. In 2024, the due dates for these payments are April 15 for the first quarter, June 17 for the second quarter, and September 16 for the third quarter. The fourth quarterly payment is due the following year on January 15, 2025.
Individuals calculate their estimated income taxes using Form 1040-ES, while corporations utilize Form 1120-W.
For those seeking assistance without the hassle of paperwork or past return retrieval, convenient online resources like PVM Accounting’s estimated quarterly taxes calculator are available. Simply answer a few brief questions to gain valuable insights into your quarterly tax obligations.
How to Choose Your LLC’s Tax Filing Status
Selecting the appropriate tax designation for your LLC involves completing specific forms tailored to your desired filing method. The form you utilize depends on the preferred tax treatment for your LLC.
1. IRS Form 8832: This is the Entity Classification Election form used by LLC owners to opt for taxation as a corporation or a disregarded entity (also known as a pass-through entity). The term “disregarded entity” refers to sole proprietorships and partnerships, as they report income on the personal tax returns of the business owners. Since they are not taxed as distinct entities, these businesses are labeled “disregarded” entities.
Form 8832 should be submitted within 75 days of your business’s formation or the commencement of your fiscal year. For instance, if you adhere to the calendar year as your fiscal year, the deadline for Form 8832 submission is March 15. However, if required, Part II of the form allows for a late election application.
2. Opting for S Corporation Status: Before deciding to file as an S corporation, it’s essential to understand the disparities between LLCs and S corporations. While S corporations may seem appealing, the stringent requirements, such as treating owners as employees and ensuring they receive a reasonable salary, can introduce unnecessary complexities to your business.
To elect S corporation status, you need to complete Form 2553. Although Form 2553 can technically be submitted at any time, the filing date determines its effective date. If you intend to transition to an S corporation in 2024, the deadline for filing Form 2553 is March 15, 2024. Filing after this date means the change won’t take effect until 2025 (or the subsequent fiscal year).
How to Request an LLC Tax Extension
Unable to meet the filing deadline? You can request an extension conveniently online. However, it’s crucial to note that an extension only extends the time for filing your tax return, not for making payments. Failure to submit payments on time may lead to fines and penalties.
For Sole Proprietors and Individual Taxpayers:
Sole proprietors follow the same extension process as individual taxpayers. You automatically receive a six-month extension if you fall into any of the following categories:
- You are an individual working in a combat zone in support of the U.S. Armed Forces (including spouses).
- You are a member of the military serving abroad.
- You are a U.S. citizen living and working overseas.
- You are a U.S. citizen residing in areas affected by severe natural disasters.
If none of the above criteria apply to you, you can request an extension using IRS Form 4868. This form is specifically designed for sole proprietors and individual income tax returns. If you intend to make electronic payments, you may have the option to apply for an extension directly through the IRS payment portal.
For Other Business Entities:
All other business types must utilize IRS Form 7004 to request an extension. This can be conveniently done through the IRS e-file service. Remember to file a separate Form 7004 for each late return you plan to submit.
The deadline to apply for an extension aligns with the original filing deadline:
- Partnerships and S corporations: March 15, 2024.
- Sole proprietors and C corporations: April 15, 2024.
Other Essential LLC Tax Deadlines
While the annual federal tax return garners much attention during tax season, it’s crucial to also be aware of deadlines for other tax forms that businesses must handle.
Here are some significant taxes and forms along with their due dates:
1099 Forms: Businesses typically need to provide 1099-NEC (for independent contractors) and 1099-MISC forms based on their transactions throughout the year. Two copies of each form must be completed—one sent to the IRS and the other to the payment recipient. Both copies should be provided by January 31, 2024.
Sales Taxes: Unlike federal taxes, sales taxes are imposed at the state level, leading to variations in filing dates depending on your location. It’s essential to be mindful of your sales tax nexus, particularly if you engage in online sales, as you may be obligated to file sales taxes in multiple states.
Excise Taxes: Certain products, such as gasoline, alcohol, and tobacco, are subject to federal excise taxes. Quarterly reporting and payment of excise taxes are done using IRS Form 720. Deadlines for these forms fall on April 30, July 31, and October 31, 2024, with the final quarter’s submission due on January 31, 2025.
Payroll Taxes: If you manage payroll, you’ll need to submit various forms covering Medicare, Social Security, and unemployment taxes. The IRS website offers a comprehensive overview of the deadlines for payroll tax returns.
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If you find yourself in need of assistance with your bookkeeping needs, don’t hesitate to reach out to us at PVM Accounting. Our team of experienced professionals is dedicated to providing tailored solutions to help you manage your finances effectively and efficiently. Contact us today to learn more about how we can support your business’s financial success.
This post is intended for informational purposes only and should not be construed as legal, business, or tax advice. It is recommended that individuals consult their own attorney, business advisor, or tax advisor regarding any matters discussed in this post. PVM Accounting bears no responsibility or liability for any actions taken based on the information provided herein.
