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(212) 641-0673 george@dimovtax.com

LLC Taxation Services

LLC Taxation Services

Starting and managing an LLC comes with a myriad of responsibilities, and understanding LLC taxation is one of the most critical aspects. Different tax classifications can significantly impact your financial outcomes, making it essential to choose the right structure for your business.

Whether you are a single-member LLC, a partnership, or considering the benefits of electing S-Corp status, we offer the expertise and support you need to navigate these choices. Our comprehensive tax services ensure that your LLC complies with all federal and state requirements while maximizing potential tax savings. 

We are dedicated to helping LLCs in all 50 states achieve optimal financial health through strategic tax planning and meticulous compliance.

LLC Taxed as Sole Proprietorship

For single-member LLCs, the IRS considers these entities as disregarded entities for tax purposes. This means that the LLC itself does not pay taxes; instead, the owner reports business income and expenses on their personal tax return. Specifically, single-member LLCs use Form 1040, Schedule C to report their income and expenses.

Key Points:

  • Tax Reporting: Single-member LLCs report business income on Form 1040, Schedule C.
  • State Requirements: Depending on the state, there may be annual reporting requirements or additional forms to submit.
  • Advantages: Simplified tax filing process, with business income and expenses reported on the owner’s individual tax return.

LLC Taxed as Partnership

For LLCs with multiple owners, the default classification is a partnership. This means the LLC must file an annual information return (Form 1065) to report its income, deductions, gains, and losses. Additionally, each partner receives a Schedule K-1, which details their share of the partnership’s income, and this must be included in their personal tax returns.

Key Points:

  • Tax Reporting: Multi-member LLCs file Form 1065 and distribute Schedule K-1s to each partner.
  • State Requirements: Some states require additional LLC reporting and state-specific tax forms.
  • Advantages: Allows for more complex ownership structures and profit-sharing arrangements.

LLC Taxed as an S-Corp

An LLC can choose to be taxed as an S-Corp by filing Form 2553 with the IRS. This election allows the LLC to benefit from potential tax savings, primarily through reduced self-employment taxes. S-Corps must adhere to specific requirements, including reasonable compensation for owners and filing an annual corporate tax return (Form 1120S).

Key Points:

  • Tax Reporting: LLCs electing S-Corp status file Form 1120S and distribute Schedule K-1s to shareholders.
  • Requirements: Must file Form 2553 to elect S-Corp status and comply with IRS regulations.
  • Advantages: Potential tax savings through reduced self-employment taxes.

Benefits of Professional Tax Assistance

The tax implications on your LLC are vital for compliance and maximizing tax benefits. Here’s how our services can help:

  • Expert Guidance: We offer expert advice on the most advantageous tax structure for your LLC.
  • Comprehensive Support: From initial setup to annual filings, we provide full support for your LLC taxation needs.
  • State-Specific Knowledge: We ensure compliance with state-specific requirements, no matter where your LLC is registered.

Additional Tax Strategies

Optimizing your LLC’s tax position involves more than just filing the correct forms. Here are some additional strategies we can implement:

  • Deductions and Credits: Identify and claim all eligible deductions and tax credits to minimize taxable income.
  • Retirement Plans: Set up retirement plans to benefit from tax-deferred growth and potential deductions.
  • Income Splitting: Strategically split income among owners to take advantage of lower tax brackets.
  • Expense Management: Properly manage and document business expenses to ensure they are fully deductible.

Process

Our streamlined process ensures that we meet your LLC’s tax needs efficiently and accurately:

  1. Initial Fac-Finding: We begin with a consultation or quick email dialogue to understand your business goals, objectives, and specifics. We discuss how we can best support your business.
  2. Document Preparation: We assist with the preparation and filing of all necessary federal and state tax forms.
  3. Ongoing Support: We provide ongoing support and advice to help you navigate any changes in tax law or business structure.
  4. Year-Round Planning: We offer year-round tax planning to ensure you’re always in the best possible tax position.

Offerings

Our experienced and dedicated professionals provide top-notch tax services for LLCs. We pride ourselves on:

  • Experience: Our team has extensive experience in handling LLC taxation across various industries.
  • Personalized Service: We tailor our services to meet the unique needs of your business.
  • Proactive Approach: We stay ahead of tax law changes to ensure you remain compliant and take advantage of new opportunities
  • Client Satisfaction: Our primary goal is your satisfaction, and we strive to exceed your expectations with every interaction.

Contact Us for LLC Taxation

Understanding how your LLC is taxed is essential for maintaining compliance and optimizing your financial outcomes. Whether your LLC is taxed as a sole proprietorship, partnership, or S-Corp, our team provides the guidance and support you need. Contact us today to learn more about our LLC tax services and how we can help you achieve your business goals.