Last updated: September 16, 2022

The U.S. Return of partnership income, more commonly known as form 1065, is a business income tax that partnership entities must file.

This particular partnership returns a lot of information to the IRS about how much it made and what kind of deductions they have from the company.

The LLC 1065 filer is important because it can protect business entity owners from being personally liable for any debts or obligations incurred by the company. This article will cover all you need to know about LLC 1065 filers!

Everything You Need to Know

Two tax form 1065 with pen

Form 65 is an income taxes return filed by LLCs treated as partnerships and LLCs with multiple owners but taxed as a partnership. The form reports the income and expenses of the partnership business entity to the IRS.

An LLC 65 filer should be familiar with form 8825 (Entity Classification Election), which details information about their rental real estate activity if applicable.

There are requirements for an LLC 65 filer to qualify as such, and it is important to know those if planning on filing form 65 with the IRS.

A limited liability company (LLC) cannot be treated as a partnership for tax return purposes unless at least two members signed articles of organization and agreed that they will share profits, losses, and draws (distributions) from the LLC in accordance with their agreement.

Do I Need to File Form 1065 if LLC Has No Income or Expenses?

No. According to the IRS, a limited liability company (LLC) will not have a partnership or corporation income tax return if no business-related income or expenses are from that particular year.

Thus it is unnecessary for you to file form LLC-65 with the internal revenue service.

Furthermore, if your LLC is inactive for the year (meaning no business transactions took place), you will not need to file a return.

On the other hand, if your LLC had income but no expenses, you will still need to file form 65 and report the net income on line 17 of that form.

Whether you have to file form 1065 or not, it is always good to make your income reported to IRS as it will make your LLC more legitimate and protect you from liabilities incurred by the business.

Filing of Form 1065

Businessman filing business tax forms with sticky notes on his desktop

Filing a business income tax return is required for LLCs with business income and expenses during the year. The form reports income, losses, deductions, and credits.

This return also provides information to the IRS about the business entity itself, such as its name, address, and EIN (Employer Identification Number).

Partnerships are not subject to self-employment taxes, but they are taxed on their share of the income.

The form is due by April 15th of the following year and can be filed electronically through IRS e-file or by mailing in a paper copy of the federal form.

Does My LLC Need to File 1065?

No. Unless the business has income or expenses, there is no need to file a tax return with IRS. If it does have business-related income or business expense, but you choose not to file a tax return for your LLC, then at least make sure that you keep a copy of all records and documents related to this business activity because, in case of an audit, you will need to show that the business did not generate any income and there were no business-related expenses.

If the business did have income and expenses, then Federal Form 65 tax return must be filed to report the net income on line 17.

To help you and your company pay income tax return, it is best to consult an attorney from a reputable law firm or a CPA for advice on federal income tax purposes.

FAQs

What Are the Benefits of Being an LLC-65 Filer?

A few key benefits to being an LLC-65 filer include limited personal liability for business debts and obligations, pass-through taxation, meaning profits and losses are reported on the individual tax return, and ease of operation and management.

Can I Be an LLC-65 Filer if I Only Have One Member?

No, to qualify as an LLC-65 filer, your LLC must have at least two members. If you are a single-member LLC, it's recommended that you file an individual income tax return instead.

The Best Tax Reporting Form?

There is no one "best" tax form, as the form you need to file depends on your business's specific facts and circumstances.

However, LLCs often use Form 65 (the income tax return) for business income and expenses.

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