Tax season is a headache for everyone, especially business owners. Complying with IRS regulations and state tax codes involves handling tax returns for your Louisiana LLC.
Filing taxes for a single-member or multi-member LLC can become overwhelming. However, knowing your responsibilities beforehand will help you avoid costly penalties or missed opportunities for maximizing your deductions.
In this article, we will discuss the process of IRS tax return filing for Louisiana LLC, focusing on classifying the taxes, reporting the taxes, deadlines, and other relevant details.
Federal Tax Filing Requirements for Louisiana LLCs
Single-Member LLCs
If a single-member LLC (SMLLC) does not elect to be treated as a corporation, then it is considered a disregarded entity by the IRS.
By default, SMLLCs will report income and expenses on Schedule C (Form 1040) which is included in their tax return. Depending on the SMLLC, the following may also be needed to accurately file self-employment taxes:
- Schedule SE (Form 1040): If subject to self-employment taxes.
- Form 8829: If claiming a home office deduction.
- Form 4562: For depreciation of business assets.
Multi-Member LLCs
A multi-member LLC is treated as a separate partnership for tax purposes by default, which means filing Form 1065 (U.S. Return of Partnership Income).
Moreover, every member receives a Schedule K-1 (Form 1065) detailing their shares of income and losses, which are factored in during personal income tax returns.
Electing Corporate Taxation
Louisiana LLCs are eligible to elect S corporation or C corporation taxation by filing:
- Form 2553: To adopt S corporation status (only if eligible).
- Form 1120-S: If taxed under an S corporation.
- Form 1120: If taxed as a C corporation.
State Tax Filing Requirements for Louisiana LLCs
Louisiana LLCs may be liable for additional state tax besides Federal filings. These comprise:
1. Louisiana Franchise Tax
- LLCs deemed corporations for tax purposes must pay and file the Louisiana Franchise Tax via Form CIFT-620.
- Opting partnership or disregarded-entity status LLCs are mostly exempted from Franchise tax.
2. Louisiana Income Tax
- An owner’s state return reports business profits made from Single-member LLCs. (Residents use Form IT-540, while nonresidents use Form IT-540B).
- Multi-member, partnership classified LLCs, submit tax return Form IT-565.
- LLCs choosing corporate tax status, submit Form CIFT-620.
3. Sales and Use Tax
- Every limited liability corporation that sells goods or taxable services in Louisiana needs to register with the Revenue Department for sales tax collection.
- Sales Tax is remitted either monthly, quarterly, or annually depending on the volume of sales.
4. Employment Taxes
- If your law firm LLC has employees, you will need to enroll in Louisiana’s withholding tax and unemployment insurance tax.
- Use L-1 and L-3 Forms to file withholding tax.
- Then, pay the unemployment tax via the Louisiana Workforce Commission.
Tax deductions and credits for Louisiana LLCs
Owners of Louisiana LLCs can take advantage of multiple tax deductions and credits to lower their taxable income, like:
Business expenses: These include office rent, utility bills, staff salaries, marketing, and office supplies.
Self-Employment Tax Deduction: The portion paid by the employer can be claimed back by the member of the LLC who pays self-employment tax.
Home office deduction: Part used exclusively for business purposes can be claimed back.
Louisiana tax credits: The state provides these for expenditure in research and development, inventory tax, and job creation.
Important Tax Deadlines for Louisiana LLCs
| Tax Type | Due Date |
| Federal Income Tax (SMLLC – Form 1040) | April 15 |
| Partnership Tax Return (Form 1065) | March 15 |
| S Corporation Tax Return (Form 1120-S) | March 15 |
| C Corporation Tax Return (Form 1120) | April 15 |
| Louisiana Franchise & Corporate Tax | April 15 |
| Louisiana Individual Income Tax | May 15 |
| Sales Tax (Monthly) | 20th of each month |
| Sales Tax (Quarterly) | 20th of the month following the quarter |
Penalties for Late Filing and Non-Compliance
If you don’t submit tax returns for your Louisiana LLC promptly, you can be subjected to penalties and interest charges listed below:
Federal Penalties for Late Filing: If you don’t submit Form 1065 and/or Form 1120-S, you will incur $220 for each partner/shareholder per month as the penalty for not submitting the documents in the designated period.
Louisiana State Penalties: The state imposes penalties of 5% each month for each unpaid tax for a period of up to 5 months totaling a maximum of 25%.
Interest on Non-Paid Taxes: Louisiana incurs interest on the balance of unpaid taxes, which compound on a daily basis until paid.
Steps to File Your Louisiana LLC Tax Return
Gather Financial Records: Have all records at hand including profit and loss statements, balance sheets, and receipts.
Establish Your LLC’s Tax Classification: Confirm if your LLC is taxed as a separate entity, partnership, or corporation.
Complete Form and submit other Federal Tax Forms: Prepare the necessary forms to the IRS about your LLC classification and submit them.
File Taxes for the State of Louisiana: Pay state taxes, income taxes, and if applicable, franchise and sales taxes.
Settle Outstanding Tax: Make attempts to settle any outstanding taxes to prevent incurring penalties and interest fees.
Store Information to prove your compliance: Keep your documents for a duration of three years in case of audits.
How EasyFiling Can Help
If you need assistance with your LLC tax filings, EasyFiling is ready to help. Our specialist staff takes care of IRS and Louisiana state tax filings and makes sure that they are accurate and submitted on time.
In case you need tax preparation or bookkeeping, or if you require assistance with compliance management, EasyFiling is fully prepared.
FAQs for Louisiana LLC Tax Filing
Do Louisiana LLCs have to file a separate state tax return?
Yes, all LLCs that are partnerships or corporations are required to file a Louisiana state return. A single-member LLC reports the business’s income on the member’s state tax return.
What is the tax rate for Louisiana LLCs?
Louisiana LLCs under corporate taxation pay corporate income tax of 3.5% – 7.5%. Pass-through taxation entities are taxed based on the owner’s tax rate.
Do I need to file estimated taxes for my Louisiana LLC?
If your LLC has any taxable income, you might need to make estimated quarterly tax payments to the IRS and Louisiana Department of Revenue.
Can a Louisiana LLC be taxed as an S Corporation?
An LLC can be treated as an S Corporation if it files Form 2553 with the IRS and fulfills the necessary criteria.
What happens if I do not file a Louisiana LLC tax return?
Not filing can lead to fines, increased tax liabilities, and even a loss of good standing with the state.
Nabin Adhikari
