What Kind of Tax Return Does One File with LLC, Corporation or Trust

What Kind of Tax Return Does One File with LLC, Corporation or Trust

IF IT IS PERSONAL: A Form 1040 is used to report any personal income (consult a CPA to learn which form is right for you)One may not need to file for their person if they did any of the following:
  1. Redeemed in lawful money all year
  2. As an individual, generated an income of less than ~$12,000 a year, falling under federal reporting thresholds
  3. Compensate/Pay trustee(s) enough each year to fall below the income reporting threshold
    1. Be aware that with employees or independent contractors the income and wages must be reported if the totals exceed the reporting threshold
IF IT IS AN LLC: If the only member of the LLC is an individual, the LLC will use Form 1040 + Schedule C, E, or F (consult a CPA to learn which form is right for you). If the only member is a corporation or the LLC has filed Form 8832 to be taxed as a corporation, the LLC will use Form 1120 or 1120S. If the only member is a trust, the LLC will use Form 1041. If it's a multi-member LLC and didn't file a Form 8832, use Form 1065.

IF IT IS A C-CORP: The corporation is taxed separately from its officers. Officers are solely responsible to file their own Form 1040s to report personal income. Corporations will file Form 1120 to report the corporation's income, gains, losses, deductions, credits, etc. for the tax year.

IF IT IS A S-CORP: Shareholders pay income taxes on any salary and the portion of S-Corp earnings. The personal tax is paid through a W-2 or a K-1 form (consult a CPA to learn which form to file). The corporation's tax is paid through a Form 1120-S to report the corporation's income, gains, losses, deductions, credits, etc. for the tax year.

IF IT IS A TRUST: The trust will report any income over $600 on Form 1041. If there have been income distributions to any beneficiaries, a Schedule K-1 will be required as well. Trusts with income under $600 do not require a tax return to be filed federally.

NOTE: Many states still require a registered entity (LLC, C-Corp, S-Corp) to file a return despite having $0 in income for the year. Federally the IRS requires all LLCs (taxed as a corporation) and Corporations to file a return despite having $0 in income for the year.

    • Related Articles

    • How Does One Change an LLC Into A C-Corp or S-Corp

      It is best to ask one's State Corporation Division or a qualified CPA within the area, but often it will require a new filing. Apple LLC and Apple Inc. are considered unique and separate entities, each having a unique name. If one owns Apple LLC and ...
    • Should One Turn an LLC Into A C-Corp

      A C-Corp offers much better protections over an LLC (LIMITED Liability Corporation); the primary word being "limited" which declares it to not be fully shielded from larger lawsuits. There is still a liability if a lawsuit goes over ~$250,000 ...
    • Is A Corporation Necessary (or) Is An Operating Trust Better Than A C-Corp

      A C-Corp is not necessary, but serves in lieu of an Operating Trust. A C-Corp is highly recommended for students with a business that earns $100,000+ a year. The upsides to a C-Corp is the ability to have a CPA file any taxes that may occur for a ...
    • How Does One Transfer Assets Into A Corporation (S-Corp or C-Corp)

      One would create a promissory note between one's self personally and the corporation. Then create a payment schedule and an interest rate that is found in the real world (5-10%) and make monthly payments of interest and maybe principal according to ...
    • IRS Says Irrevocable Trust Is Responsible For Taxes

      Here is what the IRS website says itself in quotes, "An irrevocable trust is a trust which the grantor has no control over" and cannot be repealed or annulled. "The trust will be responsible for reporting income on form 1041." Every word on the IRS ...