For the complete documentation index, see llms.txt
For the complete documentation index, see llms.txt
How single-member and multi-member LLCs report US income
By default, how your LLC's income is reported depends on how many members it has. A single-member LLC is treated by the IRS as a disregarded entity, so its income and expenses pass through to you and are reported on Schedule C (Profit or Loss from Business), which is filed as part of your personal Form
1040. A multi-member LLC is treated by default as a partnership, so the LLC files its own informational return, Form 1065 (U.S. Return of Partnership Income), and issues each member a Schedule K-1 showing their share of the profit or loss; each member then reports that K-1 income on their own personal Form 1040. In both cases, the LLC itself doesn't pay federal income tax directly. Profits and losses simply pass through to the owners' personal tax returns, which avoids the double taxation that C- Corporations face. If you'd rather have your LLC taxed differently, for example as a corporation, you can file Form 8832 (Entity Classification Election) with the IRS to change your default classification.