Filing Business Taxes for an LLC for the First Time

Filing taxes for a business LLC for the first time requires an understanding of how the LLC is taxed and which filing requirements apply. The federal tax treatment generally depends on the number of members and whether the LLC has elected to be taxed as a corporation. 

Federal taxation will depend on the total number of members and whether the LLC chooses to be taxed like a corporation. There is not one federal tax form or rate that applies to all LLC businesses.

This guide covers the basics of filing LLC taxes for the first time, including which federal forms may apply, what records support those forms, how deductions and self-employment taxes work, and when estimated payments may be required. 

How Is an LLC Taxed?

An LLC stands for limited liability company and is a company formed under state laws. In terms of federal income tax, however, the IRS does not allow any special tax treatment for LLCs. If the LLC is a single-member LLC that has not elected to be treated as a corporation, the business activity of the LLC is generally reported on a single member's tax return form. The LLC should prepare and file Form 1065 (U.S. Return of Partnership Income) and provide each member with a Schedule K-1 reporting the income, deduction, and credit allocated to him/her, if the LLC has two or more members.

Form 1120 is used in the event that an LLC decides to be taxed as a corporation. For an eligible LLC choosing to be taxed as an S corporation, Form 1120-S is filed.

Federal income tax rates for 2026 are between 10% and 37%. In general, the federal income tax rate for corporations Cc corporations) is 21% flat.

What Do You Need Before Filing?

Before filling out the form, collect the papers that will support the numbers you will put into the form. These can be:

• Business income records, invoices, and payment-platform statements

• Business bank and credit-card statements

• Receipts and records for deductible expenses

• Payroll records and Forms W-2 or W-3, if applicable

• Records for equipment and other business assets

• Prior tax returns and estimated tax payment records

• Form 1099s and other information returns received by the business 

Bank statements are important for reconciling the business's income and expense accounts, while receipts and invoices can support deductions. The asset record helps determine depreciation and any other accounting treatment. For a partnership, the accounting records will eventually support Form 1065 and the Schedules K-1.

Keep personal and business affairs apart as much as possible. A separate business bank account will make it easy to reconcile transactions and determine expenses.

What Expenses Can an LLC Deduct?

An LLC is usually allowed to take deductions for ordinary and necessary expenses in conducting the business, according to tax regulations. There is no specific percentage required in order for an expense to be deducted. It will depend upon the type of expense, its usage, and the tax laws in place.

Typical expenses of doing business are:

1. Stationery and office supplies

2. Software subscriptions

3. Marketing and advertising

4. Professional fees

5. Insurance for the business

6. Business equipment

7. Travel expenses for business purposes

Ensure you keep all your receipts, invoices, payment documents, and a description of your business purpose if necessary. Some items, such as equipment and fixed assets, might require depreciation instead of deducting the entire cost in the year of purchase.

Do LLC Owners Pay Self-Employment Taxes?

Usually, yes. An LLC that is classified as a disregarded entity would be taxed like a sole proprietor under the self-employment tax guidelines. The members of an LLC that is classified as a partnership would normally be considered self-employed rather than employees and could therefore pay self-employment tax on any income received through the partnership.

Under the 2026 tax year, the self-employment tax normally applies if the net earnings from self-employment exceed $400. This tax normally covers 92.35 percent of net earnings and falls under certain limitations. However, S corporation shareholders have unique regulations since any salaries provided to shareholder-employees fall under employment taxes.

Do You Need to Pay Estimated Taxes?

If you expect to have to pay at least $1,000 in taxes after the credits and withholding, then you may have to make the estimated tax payments if the amount of the credits and withholding is less than the minimum safe-harbor payment. Normally, this minimum safe harbor payment will be 90% of the current year's income tax or 100% of last year's tax, or 110% of last year's tax in the case of higher-income individuals.

The estimated tax payment dates for 2026 are April 15, June 15, September 15, 2026, and January 15, 2027. The underpayment of tax may result in a penalty, even if the whole tax is paid along with the annual return.

What About State and Local Taxes?

Filing of federal income tax returns is not the end of the tax burden an LLC member might face. In accordance with the location of the LLC's business operations, the company may be obliged to pay additional taxes such as state income and franchise taxes, sales and use tax, employment tax, and local taxes.

The tax burden depends greatly on the jurisdiction of the LLC; thus, you should consult tax authorities of each such jurisdiction.

Common First-Time Filing Mistakes

Avoid these problems by: 

• Settling up business bank accounts before starting on the tax return

• Not mixing personal expenses with business deductions

• Making sure of the federal tax status of the LLC before picking a form

• Comparing 1099s and other information returns to your income

• Computing estimated tax payments throughout the year instead of at tax time

• Hanging onto supporting documentation for your deductions

Should You Hire a Tax Professional?

A tax return for an LLC can be done by oneself if the company is a simple one, but if the company has several members, substantial assets, employees, international dealings, complex deductions, or corporate tax elections, then professional help is needed to file such tax returns.

Tax professionals are capable of helping out in knowing what federal forms need to be filed, reconciling books, calculating estimates, etc.

How Proper LLC Formation Can Help

Tax preparation is determined by the business structure that you have selected. Selecting the right business structure, registering for the same, separating personal and business financial affairs, and keeping proper documentation can simplify tax preparation.

In case you are just establishing your business, you should consider LLC formation services that will help you get formed and then proceed with such important work as business account setup and record keeping.

Frequently Asked Questions

Does an LLC file its own tax return?

It is based on how it is classified for federal tax purposes. If the single-member LLC stays a disregarded entity, then the business operations will be reported on the owner’s tax return form. For a multi-member LLC, the required form is 1065, whereas a corporation LLC requires the corporate return form.

What records do I need to file LLC taxes?

Maintain record-keeping of income, banking transactions, expenses, receipts, invoices, payrolls, assets, 1099’s, and tax payments. This will ensure that you have all the necessary information for completing the required federal tax form.

Does a single-member LLC pay taxes?

Yes. Taxable profits from the business carried out by the LLC are reported on the tax return of the owner.

Can I file LLC taxes myself?

Yes, if you have the knowledge regarding the classification and filing requirements. However, a tax professional may be needed if the LLC has more than one owner or employee.

Final Thoughts

The process of filling out the taxes for your LLC for the first time can be relatively simple if you have a good understanding of your LLC's tax classification, forms to fill out at the federal level, evidence required to prepare the tax return, and whether you will make any estimated tax payments.

Since your tax responsibility is dependent on your business structure and location, you will want to make sure that you consider these factors.