LLC Tax Filing Checklist: Your Guide to Staying Compliant

Navigating tax season for a Limited Liability Company (LLC) can feel like a maze. While an LLC provides legal liability protection, when it comes to taxes, its structure is incredibly flexible, offering different paths you can take. This flexibility is a huge advantage but also means you need to know exactly which route is right for you. This checklist is designed to help freelancers and small business owners in the USA understand their LLC tax filing requirements. We’ll break down the forms you need, the documents you must gather, and the critical deadlines to keep you on the right side of the IRS. Table of Contents LLC Taxation Explained This is where things get interesting. Unlike an S-Corp, an LLC doesn’t have its own tax classification. Instead, the IRS sees an LLC as a “disregarded entity” by default. This means the IRS “disregards” the LLC and taxes its owner(s) based on the business structure they’d otherwise be. This gives you a few different options:  This flexibility is a huge benefit, but the first step is knowing which classification your LLC falls under.  The Most Important Deadline to Know Your tax deadline depends entirely on how your LLC is taxed. These deadlines apply to LLCs with a calendar-year fiscal year. LLCs with a fiscal year ending on a different date have deadlines based on their tax year-end (e.g., the 15th day of the third month after the fiscal year for Partnerships and S-Corps, or the fourth month for C-Corps). Consult a tax professional to confirm your specific deadlines.  No matter your classification, if you need more time, you can file for an extension using the appropriate form (e.g., Form 4868 for a Sole Proprietorship or Form 7004 for a Partnership or Corporation). This gives you an additional six months to file, but remember, an extension to file is not an extension to pay.  The LLC Tax Filing Checklist Let’s get down to business. Here are the items you’ll need to prepare for your LLC tax filing, based on your classification.  1. Essential Financial Records  Start by getting your financial house in order. Make sure invoices and receipts are organized and complete. This is the foundation of every tax return.  2. Key IRS Forms  Feeling a bit overwhelmed by the list of forms? Don’t worry—you don’t have to be a tax expert to understand the essentials. Here’s a breakdown of the most important forms you’ll encounter and a heads-up on what to watch out for.  Form 1040 & Schedule CFor single-member LLCs, this is the main event. You will file Schedule C, Profit or Loss from Business, as part of your personal Form 1040. This form reports all your business income and expenses. A common mistake here is mixing personal and business expenses, which can lead to messy audits.  Form 1065 & Schedule K-1For multi-member LLCs, this is the main informational return. Your LLC will file Form 1065, U.S. Return of Partnership Income. This form reports the business’s overall financial activity. You’ll then use Schedule K-1 to report each partner’s individual share of the profits and losses, which they then use to file their personal returns. A frequent error is miscalculating each member’s ownership percentage, which can lead to incorrect allocations.  Form 1099-NEC: Nonemployee CompensationThis form is for reporting payments to freelancers or independent contractors who are not employees. You must file a 1099-NEC for each person you paid $600 or more during the year.   The most common mistake with this form is missing the filing deadline, which is January 31, 2026. Since that date falls on a weekend, the due date is the next business day, which is Monday, February 2, 2026. The penalties for late filing of returns due in 2025 are tiered. The penalty is $60 per form if filed within 30 days after the due date, $120 if more than 30 days late but filed by August 1, 2025, and $310 if filed after August 1, 2025, or not filed at all. Penalties for 2026 returns due in 2027 may increase due to inflation adjustments; check IRS updates for exact amounts. Note that businesses filing 10 or more returns in 2026 must e-file and obtain a Transmitter Control Code (TCC) by November 1, 2025.  Another frequent error is using the wrong form (e.g., using a 1099-MISC instead of a 1099-NEC for non-employee compensation) or entering an incorrect Taxpayer Identification Number (TIN), so be sure to double-check that information.  3. Don’t Forget These Details!  A few small mistakes can lead to big problems. Double-check these items before filing.  The Cost of Missing a Deadline The penalties for filing late depend on your LLC’s tax classification.  Get Ready for a Smoother Tax Season Preparing for an LLC’s tax filing can feel like a big responsibility. But with a clear plan and the right tools, it’s entirely manageable. By proactively gathering your documents and paying close attention to deadlines, you can minimize stress and avoid costly penalties. Disclaimer: The information provided in this guide is for informational purposes only and does not constitute legal or tax advice. For specific tax situations, always consult with a professional accountant or tax advisor. This is where having a reliable accounting system can make all the difference. When all your financials—from income and expenses to payroll—are organized and synced in one place, generating the reports you need for your tax professional (or for filing yourself) becomes a streamlined process. Fynlo is designed to simplify these tasks, so you can focus on what you do best: running your business. Ready to see how Fynlo can transform your tax prep? Schedule a call with our experts to find out more! You may also like these articles:

LLC vs Inc.: Everything You Need to Know

Choosing a business structure is like picking the right tool for a job—each has its strengths, quirks, and costs. For new entrepreneurs, the Limited Liability Company (LLC) and Corporation (Inc.) are two of the most popular options in the U.S. Both protect your personal assets, but they differ in taxes, management, ownership, and paperwork. This guide breaks it all down in plain English and a clear comparison table, so you can choose the structure that fits your business dreams. Let’s get started! Table of Contents What is an LLC? A Limited Liability Company (LLC) is like bubble-wrap for your personal assets: it shields them from business debts and lawsuits while remaining simple to run. LLC owners, called members, enjoy liability protection with fewer formalities than a corporation. To form an LLC, you file Articles of Organization with your state’s Secretary of State and pay a fee—usually between $50 and $500 (e.g., $50 in Colorado; $500 in Massachusetts). While an Operating Agreement isn’t required in every state, it’s a smart way to spell out ownership, profit splits, and decision-making rules.  Fun Fact: LLCs existed in limited form starting in the late 1970s, but their popularity has exploded since the mid-1990s. In recent years, LLCs have become the most common structure chosen by small-business owners, reflecting their appeal to modern entrepreneurs. What is an Inc. (Corporation)? A corporation is a separate legal person with shareholders, a board, and more built-in formality. You file Articles of Incorporation (fees range from $90 in Delaware to $125 in New York), adopt bylaws, and hold annual shareholder and board meetings. Corporations come in two tax flavors:  Fun Fact: Although corporations account for roughly 8% of all business tax returns, they generate about 60% of total U.S. business receipts, underscoring how most revenue still flows through corporate entities.  Key Differences at a Glance Below we compare five critical areas: liability protection, taxation, management, ownership, and compliance.  Comparison Table: LLC vs. Inc. Factor  LLC  Inc. (C Corp)  Inc. (S Corp)  Liability  Members protected unless they commit fraud/negligence. Courts pierce veil very rarely.  Shareholders protected. Veil-piercing more common than with LLCs.  Same as C Corp.  Taxation  Pass-through (Schedule C/K-1); can elect C/S Corp status; Members pay self-employment tax on profits by default.  Double taxation: 21% corporate tax + dividend tax (0%–20%).  Pass-through; no self-employment tax on distributions; strict limits.  Management  Flexible: member-managed or manager-managed; no board or meetings required.  Formal: board + officers; annual meetings and minutes mandatory.  Same as C Corp.  Ownership  Unlimited members; no stock; transfers need approval.  Unlimited shareholders; stock easy to sell; ideal for VC.  Max 100 U.S. shareholders; one stock class.  Compliance  Minimal: annual report (fees $0–$500) and basic bookkeeping.   High: adopt bylaws, hold annual meetings and minutes; several thousand dollars per year.   High: same formalities as C Corp plus S-Corp eligibility upkeep; several thousand dollars per year.  Best For  Small businesses, freelancers, hands-on owners.  Scalable startups, VC-funded ventures, public companies.  Small firms wanting pass-through taxation with corporate structure.  1. Liability Shield  Both LLCs and corporations protect personal assets, but the strength of that shield depends on following the rules.  2. Taxes  Below is a condensed overview of how each structure is taxed, focusing on key points a newcomer needs to know. LLC (Default Pass-Through):  LLC Electing S-Corp Status (Optional):  C-Corp (Traditional Corporation):  S-Corp (Standalone Election):  Taxation Summary Table:  Structure  Entity Tax Rate  Owner Tax Treatment  Self-Employment Tax on Profits?  Key Notes  LLC (Default) 0% (pass-through) Owner reports on Schedule C or K-1 → Form 1040 Yes, 15.3% on net earnings Single-member uses Schedule C; multi-member files 1065 → K-1. QBI deduction up to 20%. LLC → S-Corp 0% (pass-through) Owner takes reasonable salary (W-2); rest is dividends Only on salary (FICA) Savings vs. 15.3% if distributions > salary; requires payroll setup. LLC → C-Corp 21% Profits taxed at 21% → dividends taxed again (0%–20%) — Potential double taxation; can retain earnings; access to corporate credits. C-Corp (Standalone) 21% Dividends taxed at 0%–20% on shareholders — Traditional corporate structure; double taxation. S-Corp (Standalone) 0% (pass-through) Owner salary (W-2) + distributions via K-1 Only on salary (FICA) Must meet eligibility (≤ 100 U.S. shareholders, one stock class). 3. Management Style  4. Ownership Flexibility  5. Compliance & Cost  LLC  C Corp  S Corp Pros and Cons of LLC vs. Inc. LLC Pros  LLC Cons  Inc. Pros  Inc. Cons  Which Should You Choose? The choice between an LLC and Inc. depends on your business goals, size, and growth plans:  Need Help Deciding? At Fynlo, we understand that choosing the right business structure can feel overwhelming. Our accounting software and expert team are here to simplify the process, from formation to tax planning. Whether you’re leaning toward an LLC or a corporation, we can help you navigate the paperwork, optimize your taxes, and stay compliant.  Ready to get started? Schedule a call with Fynlo today to discuss your business goals and find the perfect structure for your success. Let’s build your dream business together!  You may also like these articles: 

Tax Filing Guide for S Corp, C Corp and LLC

Picking the right business structure is a big deal, and taxes are a huge part of that decision. In this article, we’re breaking down the tax filing side of things for C Corps, S Corps, and LLCs, so freelancers and business owners can get a handle on the forms and deadlines for each. If you’re looking for a broader comparison, Choosing the Best Business Structure for Freelancers is a solid starting point!  The article was last updated as of 4 March 2025. Keep in mind that tax rules and limits can change, so be sure to watch out for updates or consult a tax professional for the latest information.  Table of Contents Brief Highlights: Comparing C Corp, S Corp and LLC Here’s a quick rundown of the three business structures to give you the big picture. In the next sections, we’ll break down the details of tax treatment and the specific forms you’ll need to know. It’ll all come together as we go.  Category  S Corporation (S Corp)  C Corporation (C Corp)  Limited Liability Company (LLC)  Tax Forms  – Form 1120-S– Shareholders file Schedule K-1 on personal returns  – Form 1120 – Shareholders report dividends on personal returns  Depends on tax classification. See LLC section.  Filing Deadlines  March 15 2025*; extensions available  April 15 2025*; extensions available  Depends on tax classification. See LLC section.  State Taxes  Varies; some states do not recognize S Corp status Subject to state corporate income taxes  Subject to state taxes depending on classification  Eligibility Requirements  – Must be a domestic business– Up to 100 shareholders – Individuals only  – No limit on shareholders– Can include foreign and corporate owners  – No ownership restrictions – Flexible member structure  Ownership Restrictions  – Max 100 shareholders– One class of stock– U.S. citizens/residents only  – Unlimited shareholders– Can issue multiple stock classes  – No restrictions– Members can be individuals, corporations, or foreign entities  Compliance Requirements  – Annual meetings– Shareholder voting– File annual reports  – Annual meetings– Corporate governance– Strict record-keeping  – Varies by state– Fewer formalities than corporations  Average Formation Costs#  ~$1,200  ~$633  ~$50-$500 depending on state  Fundraising Ability  – Limited– Cannot issue preferred stock  – High– Can issue both common and preferred stock  Limited unless electing C Corp tax treatment  Dividend Taxation  Distributions taxed once at shareholder level  Dividends taxed twice (corporate and shareholder level)  Not applicable unless taxed as C Corp  Payroll Tax Implications  Must pay reasonable salary to shareholder-employees  Corporate officers are employees subject to payroll taxes  Members typically pay self-employment tax unless S Corp election made  Passive Income Limits (such as rent, interest, or certain royalties)  Passive income limited to 25% of gross receipts  No passive income limitations  No passive income restrictions  Liability Protection  Protects shareholders’ personal assets  Protects shareholders’ personal assets  Protects members’ personal assets  Conversion Flexibility  Can convert to C Corp; changing to LLC requires dissolution  Can convert to S Corp or LLC with filings and approvals  Can elect S Corp/C Corp taxation; conversions depend on state rules  Foreign Ownership  Not allowed  Allowed  Allowed  Administrative Burden  Higher than LLC; less than C Corp  High due to strict governance requirements  Low; fewer formalities required  Key Tax Advantages  – Avoids double taxation– QBI deduction available  – Potential for certain deductions not available to pass-through entities– Can deduct health insurance premiums for employees  – Flexible tax treatment (can choose to be taxed as a partnership, S corp, or C corp)– Simpler tax compliance than C-corp if taxed as a partnership  Key Tax Disadvantages  – Reasonable salary requirement– Limitations on QBI deduction for certain businesses  – Double taxation– More complex tax compliance  – Members subject to self-employment tax (unless taxed as C-corp)– Less established than C-corps in some states  Best For  Small businesses seeking tax savings through pass-through taxation  Larger businesses seeking growth through investment and stock issuance  Startups, freelancers, or small businesses needing flexibility  * For calendar-year corporations, Form 1120 is due on April 15, and Form 1120-S is due on March 15. For fiscal-year corporations, the deadline is the 15th day of the fourth month (1120) or third month (1120-S) after the fiscal year ends. # Formation costs vary by state and the scope of professional services.  S Corporations Tax Filing S corps offer a unique tax structure, blending the legal benefits of a corporation with the tax advantages of a partnership. This pass-through taxation model avoids the double taxation burden of C corporations, making it an attractive option for many small businesses.   Pass-Through Taxation One of the most significant advantages of an S corporation is its pass-through taxation model. Unlike C corporations, which are subject to double taxation (taxed at both the corporate and shareholder levels), S corps do not pay federal income tax at the corporate level. Instead, the corporation’s profits and losses are passed through to the shareholders, who report them on their individual tax returns (Form 1040). This structure avoids the double taxation burden and can result in significant tax savings for business owners.  Form 1120-S Form 1120-S, the U.S. Income Tax Return for an S Corporation, is the primary form S corps use to report income, deductions, gains, and losses to the IRS. It ensures the corporation’s financial activity is accurately reported and provides shareholders with the information needed to complete their individual tax returns.  The form is due by March 15th for calendar-year taxpayers (or the 15th day of the third month after the fiscal year ends). If additional time is needed to prepare the return, S corps can request an extension using Form 7004, which grants an automatic six-month extension. However, it’s important to note that an extension to file does not extend the deadline for paying any taxes owed. Estimated tax payments must still be made by the original due date to avoid penalties and interest.  Schedule K-1 Schedule K-1 details each shareholder’s individual share of the corporation’s income, deductions, credits, and other tax items. Shareholders use this information to complete their individual Form 1040.  W-2 Salary, Distributions, and Form 1040 (The Owner’s Perspective) If you own and work for an S corp, you must