If you own a small business, there’s a good chance it’s registered as an LLC. Limited Liability Corporations, or LLCs, have become very popular in the past decade, and for good reason: in many cases, these entities provide business owners with many of the benefits of owning a corporation without the downsides of an S or C-corp. An LLC is also ideal for partnerships and legal protection (that’s the limited liability part).
If you’re looking to save some money for your LLC—something all small business owners have on their minds these days—you might want to send your accountant on a vacation and file your taxes online. Not only will this be significantly cheaper, it’ll also be faster and likely nowhere near as complicated as you can imagine.
You can use the same kind of tax preparation software thousands of people use each year to file their individual taxes to file your LLC taxes. Turbo Tax particularly excels in this area with their TurboTax Business software (as opposed to the TurboTax Home & Business software flavor), especially if you have a “large” small business—if you’ll forgive the phrase—with more complex or demanding tax preparation needs.
Here’s a few things to keep in mind when you file your LLC’s taxes online:
1.) Is your LLC a single-member entity or is your business a partnership or multiple-member LLC? This should be one of the first things you take note of before beginning to do your taxes (or purchasing software). A single member entity means that you’re the sole proprietor. A multiple-member entity means that you have one or more partners (note that an LLC can have an unlimited number of members).
2.) Determine whether or not you need to pay self employment taxes on your share of the LLC’s profits for the year. Your tax preparation software should help you determine this; a general rule of thumb is that if you’re a limited partner (e.g. you’ve invested in the business but you don’t take an active role in the day-to-day), you don’t have to. If you’re active engaged in the business—which you probably are—you will.
3.) Don’t let the legal-speak and tax-terminology scare you into hiring an expensive accountant. Using software like TurboTax takes out all of the guesswork—the software simply asks you a series of questions in natural, easy English. Once you’ve answered all of the questions, your taxes will be done. It really is that easy.Social tagging: C-Corp > Filing Taxes Online > LLC > multiple-member > partnership > S-Corp > self employment taxes > sole proprietor