Did your LLC have no income this year? Many business owners assume that if their company didn’t earn money, they don’t have to file taxes. However, that’s not always the case. Here’s what you need to know about how to file taxes for LLC with no income.
1. Single-Member LLCs (Disregarded Entity)
If you’re the sole owner of an LLC, the IRS treats it as a disregarded entity for tax purposes. You must file:
- Form 1040 (U.S. Individual Income Tax Return)
- Schedule C — even if there’s no income or expenses, it’s wise to file a “zero return” to stay compliant.
Note: If there were no business activities at all, the IRS technically doesn’t require a return—but filing can protect you from future audits or confusion.
2. Multi-Member LLCs (Partnerships)
For LLCs with multiple members:
- File Form 1065 (U.S. Return of Partnership Income)
- Provide Schedule K-1 to each partner—even if there’s no income or loss.
Filing Form 1065 shows the IRS that the business is still active, even if dormant. Failure to file may trigger late fees or penalties.
3. LLC Electing Corporation Taxation
If your LLC has elected to be taxed as an S Corporation or C Corporation, the filing rules change:
- S Corp: File Form 1120-S, and issue Schedule K-1 to shareholders.
- C Corp: File Form 1120.
Corporations must file annually, even with zero income or business activity.
4. State Filing Requirements
Some states require an annual report or minimum tax even if your LLC made no money. For example:
- California requires an $800 minimum franchise tax.
- Delaware requires an annual franchise tax and report.
Check your state’s tax authority for local rules.
5. Why Filing Still Matters
Even with no income:
- It keeps your business in good standing
- Helps avoid IRS penalties
- Shows that your business is still active or compliant
Conclusion
Wondering how to file taxes for LLC with no income? The short answer is: you usually still need to file. The forms and requirements depend on your LLC’s structure and whether you’ve elected to be taxed differently.
