A reader asks: This is my first year having an LLC. I’m getting started on my tax return, but I’m confused about which forms I need to file. I see in some places that it says I need to file a 1065, and in other places it says I just put the income on my 1040 (using schedule c?). Which one of these is right?
Answer: That depends on how many members (ie, owners) there are for your LLC.
If you’re the only owner, your LLC is going to be taxed as a sole proprietorship. In that case, yes, you’d fill out Schedule C, and you would include the profit from the business on your Form 1040.
If, however, your LLC has multiple owners, it will be treated as a partnership for Federal income tax purposes. In other words, you’ll fill out Form 1065, and each of the partners will receive a Schedule K-1 indicating their share of the business profits. Then each partner reports those profits on their 1040, using Schedule E.
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