Oklahoma businesses may benefit from tax reduction, asset protection, and flexibility through an LLC (Limited Liability Company) formation. LLCs, just like any other business structure, have certain requirements that need to be strictly followed in terms of IRS tax filing.
Not complying with the necessary tax obligations can lead to penalties as well as inflicting unwanted interest charges on the business. Having a clear understanding of an LLC’s tax liabilities may reduce or eliminate these consequences.
In this article, we will discuss the process of IRS tax return filing for Oklahoma LLC, focusing on classifying the taxes, reporting the taxes, deadlines, and other relevant details.
Understanding LLC Tax Filing in Oklahoma
An LLC formed in Oklahoma has several tax options. An LLC can select which option best suits it depending on the type of business it operates and how the business prefers to be taxed.
There are numerous categories available for LLCs with the IRS, and each has its tax obligations. The three most common are:
- Disregarded Entity (Single-Member LLC)
- Partnership (Multi-Member LLC)
- Corporations (LLCs that elect to be taxed as corporations)
Understanding the obligations and specifications under each option will help business owners map out tax obligations as well as the optimal time to file for taxes.
IRS Tax Filing for Single-Member LLCs in Oklahoma
According to the IRS, single-member LLCs are considered “disregarded entities.” As such, they do not independently file tax returns. The single-member LLC owner files a personal tax return and, in most cases, the IRS taxes single-member LLCs as sole proprietorships.
What You Need to Know:
Form 1040: Your LLC and personal income tax return is reported on Form 1040 (U.S. Individual Income Tax Return). Also, when reporting profits and losses, Schedule C (Profit or Loss from Business) must be included.
Schedule SE: Since you are self-employed, you must also file Schedule SE (Self Employment Tax) to report and determine the amount you owe in self-employment taxes, which also includes Social Security and Medicare taxes.
Tax Deductions: In addition to the standard tax deductions, you can also deduct business-related expenses such as office supplies and business travel. Receipts and detailed records should be kept to support these claims.
Key Dates for Tax Filing:
Due date: Your tax return is due on the 15th of April each year. You are allowed to apply for an extension by filing Form 4868 (Automatic Extension of Time to File U.S. Individual Income Tax Return) if you require extra time.
Paying Estimated Taxes: You will need to file estimated tax payments on a quarterly basis with Form 1040-ES if you expect that you will owe over one thousand dollars in taxes for the year.
Filing Taxes for a Multi-Member LLC in Oklahoma
The IRS generally treats multi-member LLCs as Partnerships. This means that the LLC does not pay any income taxes.
Rather, the LLC submits an informational return and passes the income and expenses onto the members, who in turn report their portion of the LLC along with the profits and losses on their tax returns.
What You Need to Know:
Form 1065: A multi-member LLC is required to file Form 1065 (U.S. Return of Partnership Income). The form reports the income, deductions, and distribution of the LLC. A Form 1065 must be submitted by March 15th each year.
Schedule K-1: Every single Member of the LLC gets a Schedule K-1 which includes their share of the LLC’s income, deductions, credits, and other associated items. Each member has to file a K-1 form and report the earnings from the LLC alongside their other personal income.
Self-Employment Taxes: You are usually considered self-employed as a member of a multi-member LLC. Therefore, self-employment taxes (Social Security and Medicare) would be applied to your share of the profits from the LLC.
Key Dates for Filing:
Form 1065 Deadline: The last day you can submit Form 1065 is March 15th.
Member Filing Deadline: All members in receipt of a Schedule K-1 have until April 15 to file their tax returns.
IRS Tax Filing for LLCs Treated as Corporations
It is possible for an LLC in Oklahoma to select corporation status for taxation. This is likely to be advantageous for some LLC owners regarding certain tax planning approaches.
An LLC may elect to be treated as either a C corporation or an S corporation, therefore each LLC will have different tax requirements depending on the selection made.
C-Corporation Tax Filing:
Form 1120: If the LLC decides to be taxed as a C corporation, then it has to file Form 1120. A C corporation will be responsible for paying corporate income taxes on their profit and in turn the owners or shareholders of the company on receiving dividends will also have to pay taxes on that.
Corporate Tax Rate: C corporations pay a flat 21% federal corporate tax, the company does not pay tax based on their revenue.
Dividends: Shareholders who receive dividends are taxed again, in addition to the tax that is paid for dividend income received.
S-Corporation Tax Filing:
Form 1120S: If the LLC elects an S Corporation tax profile, then they can also file form 1120S which is the U.S. income tax return meant for owners of an S corporation. S corporations don’t pay taxes like a C corporation does. Instead, the profits are passed down to the shareholders who in turn pay taxes through their personal tax returns.
Eligibility to make S-Corp elections: To obtain S-corp status, the LLC must qualify, and such qualifications include restraining shareholder provision under 100 while limiting the company’s shares to one single type.
Key Dates for Filing:
C-Corp Filing Deadline: Filing Form 1120 is due by April 15th. This date will be April 15th or the 15th day of the fourth month after the close of the corporation’s fiscal year.
S-Corp Filing Deadline: Filing Form 1120S is due by March 15th.
Key Tax Deadlines for Oklahoma LLCs
Oklahoma LLC owners need to be familiar with important tax deadlines to avoid penalties and file on time. The deadlines differ by the type of your LLC:
- Single Member LLC: Individual tax return filers must submit Form 1040 with Schedule C by April 15th.
- Multi-Member LLC: By March 15th, Form 1065 must be filed, and all members must complete their personal tax filings by April 15th.
- C- Corporations: Must file Form 1120 by April 15th (or the 15th of the fourth month after the corporation’s fiscal year ends).
- S Corporations: Must file 1120S by March 15th.
If more time is needed, an extension may be filed through Form 4868 for personal returns and Form 7004 for business returns.
How to File Taxes for Your Oklahoma LLC
Compile Business Records: Prepare your tax paperwork and assemble all records, like revenue and expenses, and relevant documents needed. It may help to use accounting software, or a budget spreadsheet to simplify this task.
Select Needed Forms: You will need to file Forms 1065, Form 1040 with Schedule C, Form 1120, or Form 1120S depending on the classification of your LLC.
Submit the Forms: Provide all the information requested on the tax forms, such as your business income, expenses, and deductions, and do so as accurately as possible.
Electronically or Via Mail: It is becoming increasingly common for LLCs to e-file their returns using the IRS e-file system. Yet these forms can also be printed out and returned through standard mail, although e-filing is usually much quicker.
Pay Taxes: Make sure to pay on time if you owe money during tax season. You have the option to pay through a bank wire, credit card, or any other available method.
Tax Deduction for Oklahoma LLCs
The owners of the LLC can claim different tax deductions which reduce their taxable income. Below are the most frequently claimed tax deductions for Oklahoma LLCs:
Startup Costs: Some of the startup costs may be claimed, such as legal fees associated with ordering and forming your LLC.
Business Expenses: All ordinary and necessary business expenses such as office supplies, rent payments, utility payments, and business insurance are tax-deductible.
Home Office Deduction: If your business is run out of your place of residence, you can take a home office deduction.
Vehicle Expenses: Expenses of vehicles that are utilized for business purposes can have mileage or vehicle expenses deducted.
Depreciation: Certain assets purchased for the business, like some equipment or pieces of real estate, can have their cost claimed but the value will be less as time goes.
Penalties for Late Filing
Not filing the taxes for your LLC on time comes with fines that can be quite costly. These consequences can be as a result of:
- Penalty for Late Filing: The IRS can charge a penalty of up to 5% of the unpaid taxes for each month the return is overdue, to a maximum of 25%.
- Penalty for Late Payment: If you owe taxes and fail to pay them on time, the penalties start piling on along with interests.
- Late charges: Any overdue taxes attract interest which is charged at the annual federal short rate + 3%.
To prevent incurring these penalties, it is very important to file on time. If filing on time is a hassle, there is an option to request an extension.
How Easyfiling Can Help File Taxes for Oklahoma LLCs
Filing tax returns for your LLC is not an easy task if you’re not familiar with the requisite forms, Easyfiling is here to help. Our specialists guarantee that all Oklahoma LLC owners who come to us get their taxes filed properly and promptly.
Our Services Include:
- Tax Filing Assistance: We identify which forms your LLC must file and ensure they get completed and submitted before the deadlines.
- Maximizing Deductions: We analyze your business expenditures to ensure you qualify for all possible tax deduction benefits.
- Tax Advice: We provide guidance that helps your business reduce its tax liability while remaining compliant because we know how to effectively manage tax obligations.
- Electronic Filing: We also provide e-filing services which, when completed, guarantees your taxes will be filed quickly and safely.
Let Easyfiling help you and you will not have to worry about Oklahoma LLC taxes ever again! Contact us today for personalized support.
FAQs About IRS Tax Return Filing for Oklahoma LLC Owners
1. What happens if I miss the deadline to file my LLC taxes?
Missing the deadline can lead to penalties and interest due after filing. If you need additional time, there is an option to file an extension request on Form 4868.
2. Do I have to file taxes if my LLC did not make any money?
Yes. If your LLC is revenue-free, a return still needs to be filed. For single-member LLCs, file 1040 with a Schedule C attached. For multi-member LLCs, file 1065.
3. Is it possible to deduct the startup expenses of my LLC?
You can deduct some startup expenses, and in your first year, that amount can be as high as $5,000, with the rest being amortized for 15 years.
4. What Form does my LLC file for Taxes?
Your business structure determines the file form for your LLC. For single-member LLCs, you would file Form 1040 alongside Schedule C. Meanwhile, multi-member LLCs utilize Form 1065. If your LLC is taxed like a corporation, you would file Form 1120 or Form 1120S.
5. Does Easyfiling assist with LLC tax filing?
If you need support with filing your LLC taxes, you can consult us for assistance. At Easyfiling, we strive to make sure that your LLC taxes are filed correctly and promptly.
Nabin Adhikari
