Important tax deadlines for limited liability companies (LLCs)

Your LLC is taxed based on its tax classification. The IRS offers four classifications LLC owners can select based on their business structure, number of members, business income, and tax benefits.

These are the most common tax classifications for LLCs:

• Disregarded entity (Sole proprietorship): As the default classification for single-member LLCs, the IRS disregards sole proprietorships as separate business entities for income tax purposes. Instead, all business income and expenses are reported on the owner’s personal tax return, who is then responsible for paying federal income taxes at their personal rate and self-employment tax on all profits.
• Partnership: As the default classification for multi-member LLCs, partnerships have two or more owners. Like disregarded entities, partnerships are a pass-through tax structure, meaning the business doesn’t pay federal income tax. Instead, each member reports their share of the business’s profits and losses on their individual income tax returns, paying individual income tax and self-employment tax on their share of the profits.
• S corporation (S corp): An LLC can elect S corp status by filing IRS Form 2553, Election by a Small Business Corporation. An S corp allows an owner who actively works for the business to be an employee and receive a reasonable salary, subject to FICA payroll taxes. The remaining profits, or distributions, are passed through to the owner and are typically not subject to self-employment tax, which can mean substantial tax savings for profitable businesses.
• C corporation: An LLC can elect to be taxed as a C corp by filing IRS Form 8832, Entity Classification Election. As a C corp, a business is treated as a separate tax entity subject to the flat federal corporate tax rate on its profits and must file its own corporate tax returns. This can lead to double taxation; if the business’s profits are distributed to owners as dividends, those dividends are taxed again at the individual level. This option is typically recommended for larger businesses planning to earn significant income or seeking outside investment capital.

Tax laws can be really complicated. Hiring a CPA or tax professional can help you determine the right classification for your type of business, maximize your tax deductions, and assist with bookkeeping and compliance issues.

* If a deadline falls on a weekend or federal holiday, it moves to the next business day.

Taxpayers using a fiscal year statement period other than a calendar year might be eligible to apply to follow fiscal year reporting. If the IRS allows your LLC to do this, here are the fiscal year tax return due date guidelines:

• Sole proprietorships and C corps: Returns are due on the 15th day of the third month after the company’s year-end.
• Partnerships and S corps: Returns are due on the 15th day of the fourth month after the company’s year-end.

For example, if the fiscal year ends on March 31, a C corp tax deadline would be June 15, while a partnership deadline would be July 15.

If your small business has employees, you must file certain employment tax forms every year by January 31. These forms depend on which type of employment you offer, such as:

Full-time and part-time employees: You must submit IRS Form W-2, Wage and Tax Statement, for every employee, to report their wages and tax withholdings.

Freelancers and independent contractors: Some businesses are required to file 1099 forms to report payments to nonemployees, such as:

• IRS Form 1099-MISC, Miscellaneous Information reports payments for royalties, prizes and awards, attorney fees, and other items.
• IRS Form 1099-NEC, Nonemployee Compensation details payments to freelancers or independent contractors.

Typically, the majority of LLCs are required to file a federal tax return, even if they earned little to no income. However, depending on your company’s tax classification status, there might be certain circumstances that allow you not to file. For example:

• If your sole proprietorship had no income or business deductions, you don’t have to file a separate Schedule C as part of your personal Form 1040.
• When your partnership has no income and no expenses or credits to report, you and your partners aren’t required to file a Form 1065.

You also have to consider state tax laws. Even if your LLC is inactive, every state has different filing requirements or annual fees. For example, Michigan mandates annual statements regardless of business activity.

Even if you don’t owe any federal income tax, if you file your business taxes late, you may still face penalties, depending on how your LLC is taxed.

Sole proprietorships and C corps typically don’t face late filing penalties. This is because the “failure to file” penalty is generally calculated as a percentage of the unpaid tax, meaning if there’s zero tax owed, there’s zero penalty to pay.

However, pass-through entities—such as partnerships and S corps—that are late filers usually get hit with significant penalties from the IRS, which can add up quickly and snowball into other penalties. These penalties can include:

• Failure-to-file penalty: As the primary penalty, this fee is a flat rate calculated based on a set dollar amount for each month the return is late, multiplied by the number of partners or shareholders. This penalty is charged every month a return goes unfiled, typically up to 12 months.
• Failure to furnish Schedule K-1 penalty: S corps and partnerships are required to provide a Schedule K-1 form to each owner, which is generated after the business files its tax return. Missing the March 15 tax return deadline can result in a failure to provide employees with correct and timely Schedule K-1s, resulting in additional penalties per delayed K-1 form.
• Late personal tax penalties: Late business returns can create a domino effect for personal tax filings. This is because Schedule K-1 forms are required for owners to complete their personal income tax returns by the April 15 deadline, leading to penalties on the owner’s personal return as well.

Late-filing penalties can make a significant dent in a small business’s bank account. You can avoid this by paying taxes on time and requesting a six-month extension when you need additional time to file the necessary paperwork.

The IRS may waive penalties if you can prove that the failure to file was due to unavoidable circumstances instead of negligence. First-time penalty abatement may also be an option if your business has a solid compliance record.

The U.S. tax system is pay-as-you-go, meaning you must pay taxes as you earn or receive income throughout the year. Since LLC owners typically don’t have taxes regularly withheld from their income like W-2 employees, they must make estimated tax payments every quarter. Missing a payment due date can result in substantial penalties—even if your annual return is filed on time.

These estimated tax payments are enforced for several reasons, including:

• Provide steady revenue for the federal government
• Help small businesses avoid large year-end tax bills
• Ensure LLCs avoid tax underpayment penalties
• Cover various tax liabilities, including Social Security and Medicare

Who needs to make quarterly tax payments?

• Sole proprietors, partnerships, and S corporation stakeholders typically must make estimated tax payments if they expect to owe tax of $1,000 or more when their return is filed.
• C corporations must pay estimated taxes if they anticipate they’ll owe $500 or more in tax when their return is filed.

Here’s when to pay estimated taxes in 2026: