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What are the steps that an LLC in Illinois needs to take when it comes to filing taxes for the first time?

Picture of Chris Battis By   ·  1 minute read

As a lawyer, it is important to understand the process of filing taxes for an LLC in Illinois. Here are the steps to take when it comes to filing taxes for the first time:

  1. Obtain a Federal Employer Identification Number: Before you can file taxes, you need to have a Federal Employer Identification Number (FEIN), which acts as a Social Security number for your LLC. You can obtain a FEIN from the IRS by completing Form SS-4.
  2. Determine Your LLC's Tax Classification: An LLC is classified as either a disregarded entity, partnership, S corporation, or C corporation for tax purposes. You will need to determine your LLC's tax classification before filing taxes so that you know which forms to fill out.
  3. Prepare Your Income Tax Return: As an LLC, you file your taxes using Form 1065 for partnership tax returns or Form 1120S for S corporation tax returns. These forms require you to report all income and expenses for the LLC, including any income or losses passed through to members.
  4. File Illinois State Taxes: In order to file Illinois state taxes, an LLC in Illinois must file an annual report with the Secretary of State's office. An LLC's first annual report must be filed within 60 days of formation, and then annually thereafter. The annual report must include the LLC's name, address, registered agent, purpose, and any other information required by the Secretary of State. The fee for filing the annual report is $75.
  5. Pay Federal and State Taxes: An LLC is taxed as a pass-through entity, which means that the LLC's profits and losses flow through to the members, who report this on their personal tax returns. Members must pay self-employment taxes on their share of the profits, which includes Social Security and Medicare taxes. Additionally, an LLC may be subject to Illinois state income tax.

Overall, the steps to take when filing taxes for an LLC in Illinois include obtaining a FEIN, determining your LLC's tax classification, preparing income tax returns, filing the annual report with the Secretary of State's office, and paying federal and state taxes. It is important to note that tax laws can change frequently and may be subject to interpretation, so it is always recommended to consult with a licensed attorney or tax professional for specific advice on your LLC's tax situation.