For federal income tax, you pay your LLC taxes on your own return, unless the LLC is taxed as a C corporation.
The IRS has no separate tax category for LLCs. By default, it taxes a single-member LLC like a sole proprietorship and a multi-member LLC like a partnership. Either way, the owners pay the tax on the profit, whether or not they take it out. An LLC can elect to be taxed as a corporation instead.
Updated · Sources
LLCs taxed by default, 2026
- 15.3%
- is the self-employment tax on 92.35% of an owner’s business profit, generally charged on top of income tax.
- 20%
- of qualified business income is generally deductible, within a cap set by the owner’s taxable income.
- March 15
- is the due date for a calendar-year multi-member LLC’s Form 1065, a month before its owners’ returns.
The 12.4% Social Security part of the 15.3% stops at the year’s wage base. Wages from a job use up that base first. The 2.9% Medicare part has no cap.
Which of the four LLC tax classifications is yours?
Your LLC’s first tax filing follows its default classification, unless the LLC elects another. Without an election, adding or losing members can switch it between disregarded and partnership status.
One member, no election: a disregarded entity
By default, the IRS treats a single-member LLC (SMLLC) as its owner’s own business. The owner reports it on Schedule C of Form 1040, or on Schedule E for a rental. Business profit generally carries self-employment tax, though rent from real estate is usually exempt.
Two or more members, no election
An LLC with two or more members is taxed as a partnership by default. The LLC pays no federal income tax itself. It files Form 1065, reporting the profit to the IRS, and gives each member a K-1 with their share.
An election to be taxed as a C corporation
An LLC can file Form 8832 to be taxed as a corporation. It then files Form 1120 and pays federal income tax on its own profit. Profit it pays out as dividends is taxed again on the owners’ returns, which is called double taxation.
An election to be taxed as an S corporation
An LLC with eligible owners elects S corporation tax on Form 2553 alone, with no Form 8832. It then files Form 1120-S, and its profit passes through to the owners. The form needs every member’s consent and is due no later than 2 months and 15 days into the first tax year it covers.
An LLC whose only member is a corporation or a partnership is disregarded too. Its business then goes on that owner’s return.
On $60,000 to $150,000 of profit, a single-member LLC’s owner pays about 20% to 25% in federal tax.
$60,000 of profit
$12,037
Self-employment tax is $8,478, and income tax is $3,559.
$100,000 of profit
$22,365
Self-employment tax is $14,130, and income tax is $8,235.
$150,000 of profit
$37,607
Self-employment tax is $21,194, and income tax is $16,413.
Self-employment tax uses the rate and base shown at the top of the page. No case reaches the wage base. Half of that tax is deducted in figuring income tax. In all three cases, the qualified business income deduction is limited to 20% of taxable income, figured before the deduction. Income tax then follows the 2026 brackets of 10%, 12% and 22%, after the $16,100 standard deduction. Figures use the rate schedule and are rounded to the dollar, so the IRS Tax Table may differ by a few dollars. State tax is extra.
When are single-member and multi-member LLC taxes due for 2026?
Owners who expect to owe $1,000 or more must generally pay during the year, in four estimated payments, or owe a penalty. For 2026 they are due April 15, June 15 and September 15, 2026, and January 15, 2027.
| Single-member LLC | Multi-member LLC | |
|---|---|---|
| Federal return | Schedule C Part of the owner’s Form 1040 | Form 1065 The LLC’s own return |
| Return due | April 15, 2027 | March 15, 2027 |
| K-1s to members | None | By the return’s due date |
| Late-filing penalty | A percentage of unpaid tax Nothing if no tax is due | $260 per member a month For each month or part, up to 12, even if the LLC owes no tax |
An LLC taxed as a corporation files on corporate dates instead. For 2026, Form 1120-S is due March 15, 2027, and Form 1120 is due April 15, 2027. Either late-filing penalty is excused for reasonable cause.
What do owners get wrong about LLC tax filing?
An LLC with no income may still have to file
A multi-member LLC must file Form 1065 in any year with income or a deductible expense. An LLC taxed as a corporation files every year, whatever it earns. Some states also charge an LLC every year, with or without income, as California does.
Forming an LLC saves no federal tax by itself
Without an election, a single-member LLC’s owner pays the same federal tax a sole proprietor would on the same profit. The write-offs are the same as well, including the qualified business income deduction, which Congress made permanent in 2025.
A single-member LLC with no election cannot put its owner on payroll
A disregarded LLC is not its owner’s employer, so it cannot pay the owner W-2 wages. The owner takes draws instead, and self-employment tax generally falls on the whole profit, drawn or not. Under an S corporation election, the owner is paid a reasonable salary, and the rest of the profit carries no payroll tax.
A foreign-owned single-member LLC must file Form 5472
A single-member LLC with one foreign owner files Form 5472 and a pro forma Form 1120 for any year with a reportable transaction. Even the owner putting money in counts as one. Failing to file costs $25,000 a year. If it is still missing 90 days after an IRS notice, each further 30 days, or part of 30 days, adds $25,000.
The state creates your LLC, and the IRS only issues its EIN
An LLC is created under state law, by a filing with your state. The IRS issues its EIN, the LLC’s federal tax number, free of charge. For federal tax, a US-owned single-member LLC with no election needs one only if it has employees or owes excise tax.
A change of classification generally stands for 60 months
A Form 8832 election can take effect as early as 75 days before the form is filed. After an election that changes its classification, the LLC generally cannot change again for 60 months. The IRS can allow an earlier change, for example once new owners hold more than half the LLC.
Valim’s CPAs confirm your LLC’s tax status, then prepare your LLC tax return.
Valim is a CPA firm for LLCs and their owners, with federal and state returns in all 50 states.
- Your accountant is a licensed US CPA, who prepares the LLC’s Schedule C, Form 1065, Form 1120 or Form 1120-S.
- We compare your tax under the default rules with an S or C corporation election, before the election deadline.
- We set each owner’s four estimated payments from the LLC’s profit.
- Your bookkeeper’s year-end books give us the LLC’s profit, and each member’s share of it.
- If the IRS or a state sends a notice on a return we prepared, we handle the response as part of your fee.
- Individual return
- from $195
- Business return
- from $495
We quote a flat fee before work starts. We do not bill hourly.
LLC tax questions.
How is an LLC taxed by the IRS?
The tax code has no LLC category, so the IRS taxes an LLC under one of four classifications. By default, a single-member LLC is disregarded, and its owner reports it on Schedule C (Schedule E for rentals, F for farms). A multi-member LLC is a partnership by default, a pass-through entity that files Form 1065 and gives each member a K-1. Either kind can elect C corporation tax on Form 8832, or S corporation tax on Form 2553 if its owners are eligible.
How much should an LLC put away for taxes?
Each owner of a default LLC owes tax on their share of its profit, whether or not the LLC pays it out. So in a multi-member LLC, each member makes their own estimated payments. Each extra dollar of profit costs about 23 cents of federal tax in the 12% bracket, or 30.5 cents in the 22% bracket. Those rates hold below the Social Security wage base, and state tax is extra. Paying the safe harbor amount on time avoids the federal penalty.
How much does an LLC have to earn to file taxes?
Multi-member LLCs and LLCs taxed as corporations must file at any income. A multi-member LLC is excused only in a year with no income and no deductible expenses. A single-member LLC with no election files no federal income tax return of its own, and its owner files under the sole proprietor rules.
What is the downside of having an LLC?
For tax, the main downside is that the owners generally pay self-employment tax on their share of the LLC’s profit. A single-member LLC with no election cannot pay its owner wages, though an S corporation election can put the owner on payroll. A multi-member LLC files Form 1065 each year it has income or expenses. A late 2026 return costs $260 per member for each month or part, unless there is reasonable cause. Some states tax the LLC itself, even when the IRS disregards it, and Texas does so above a revenue threshold.
Sources
- 26 C.F.R. § 301.7701-3, Classification of certain business entities
- 26 C.F.R. § 301.7701-2, Business entities; definitions
- IRS, Single member limited liability companies
- IRS, Instructions for Form 1065 (2025)
- 26 U.S.C. § 6072, Time for filing income tax returns
- IRS, Schedule SE (Form 1040) (2025), Self-Employment Tax
- 26 U.S.C. § 199A, Qualified business income
- IRS, Rev. Proc. 2025-32 (2026 inflation adjustments)
- IRS, Form 1040-ES (2026), Estimated Tax for Individuals
- 26 U.S.C. § 6012, Persons required to make returns of income
- 26 U.S.C. § 6017, Self-employment tax returns
- 26 U.S.C. § 1402, Definitions (net earnings from self-employment)
- IRS, Instructions for Form 2553 (Rev. December 2020)
- IRS, Instructions for Form 5472 (Rev. December 2024)
Reviewed and updated September 2026. General information, not advice for your situation.