What is a Limited Liability Company (LLC)?
A limited liability company is a combination of a sole proprietorship, partnership, and a corporation to make certain that the company’s owners are not personally liable for the company’s debts and liabilities. The members of an LLC are not responsible for any lawsuits or debts. If an LLC files bankruptcy, those affiliated do not have to use personal money to pay off the debts of the company. The IRS treats LLCs as either a corporation, partnership, or a “disregarded entity.” Unlike an S Corporation or C Corporation, an LLC is a lot easier to set up providing more protection and flexibility.
Advantages of Starting an LLC
- Creating an LLC provides you limited liability for business debts & obligations
- Flexible management
- Flexible profit distributions
- There are no ownership restrictions
- Minimal compliance requirements
- There is no need to file a corporate tax return
- You don’t need to be a U.S. citizen or a permanent resident
What Types of Businesses Should Choose an LLC?
An LLC is most likely the best choice for your business if you are looking for flexible business management and taxes. LLCs are very convenient for small business owners because it provides the same protection as a corporation, minus all the extra formalities and complications that a corporation brings forward.
When is the LLC Filing Deadline for 2019?
The filing deadline for a limited liability company is March 15, 2020. A limited liability company has three different ways to file its tax returns, this includes:
- LLCs as a sole proprietorship → file Schedule C on the owner’s personal tax return
- LLCs as a partnership→ file partnership tax return using Form 1065
- LLCs as a corporation→ file either an S corporation tax return (Form 1120S) or a C corporation tax return (Form 1120)
If needed, you can request an LLC extension using Form 7004.
If you’re struggling to file for LLC, don’t hesitate to seek professional assistance. At IRS Audit Group, our tax professionals will help facilitate your tax filing process, ensuring that it is completed properly and on time.