The User-Friendly Guide to Federal Taxes for LLCs

Types of Federal Taxes for LLCs

Federal Self-Employment Tax

All members or managers who take profits out of the LLC must pay self-employment tax. This tax is administered by the Federal Insurance Contributions Act (FICA) and covers Social Security, Medicare and other benefits. The current self-employment tax rate is 15.3 percent. (12.4% for Social Security and 2.9% for Medicare).

You’ll be able to deduct some of your business expenses from your income when calculating how much self-employment tax you owe. Moreover, Social Security taxes have an income limit. In 2025, this income limit is $176,100 for a maximum tax of $21,836. The 2.9% Medicare tax has no income limit.

Federal Income Tax

You must also pay regular federal income tax on any earnings you take out of the LLC. The amount of income tax you pay depends on several factors including your earnings, current income tax bracket, deductions and filing status.

You only pay federal income tax on profits you take out of the business (as well as any salary you take), minus permitted deductions and allowances. These include your tax-free amount, plus business expenses and other deductions for areas such as healthcare and some retirement plans.

The filing deadline for annual LLC income returns is the first business day after April 14th. However, if your LLC plans to file its federal taxes as an S corp, that filing deadline is the first business day after March 14th. Find exact dates with our full calendar of federal LLC tax filing deadlines (see below).

Estimated Taxes

Most LLCs must pay estimated taxes throughout the year, depending on the amount of profit and income they expect to make. The rule of thumb from the IRS is to pay estimated taxes if you expect your total tax liability at the end of the year to be more than $1,000. But it’s also important to note that the penalty for failing to pay estimated tax is proportional to the amount you owe. So, if you misjudge and end up owing $1,500, your estimated tax penalty will be minimal. If you hoard $25,000 in tax liabilities throughout the year, the penalty will be stiffer.

The most common types of estimated tax are:

• Federal income tax

• Federal self-employment tax

Most LLCs pay estimated taxes quarterly, but the dates aren’t evenly spaced, so don’t get caught off guard! The filing deadlines for estimated taxes are on or near the 15th of the month in April, June, September, and January. Find exact dates and more federal LLC tax filing deadlines (see below).

Payroll Taxes

There are some additional tax implications when your LLC starts paying employees. Speak to your accountant to get clear guidance for your company’s situation, but there are generally three things you need to consider. 

Payroll Tax Withholding

All employers are required to withhold employment or payroll taxes from their employees’ wages as well as making their own contributions. You’ll withhold 7.65 percent of your employees’ taxable wages, and you’ll be responsible for paying an additional 7.65 percent as a separate employer contribution. This is the same 15.3 percent self-employment tax that business owners pay on their pass-through income or salary allocation when filing as an S corp.

Employee Income Tax Withholding

Both payroll tax withholding and employee income tax withholding is filed quarterly with the IRS using Form 941. To estimate your employee’s income tax liability, you’ll need them to fill out Form W-4. Unless you already have a background in bookkeeping and payroll management, this is often the point at which business owners seek out a bookkeeping service to help manage their business!

Unemployment Insurance Tax Payments

The default tax rate for federal unemployment insurance is 6% of the first $7,000 of income per employee and is filed on a quarterly basis with Form 940. However, most employers get a discount on their federal UI taxes by filing and paying their state-level unemployment insurance taxes on time and in full. 

Get a better understanding of the relationship between your LLC state and federal tax liabilities by visiting our state-by-state LLC business guides.

Other Taxes and Duties

Finally, depending on your industry, you may be liable for certain other taxes and duties. For example, if you sell gasoline, you may need to pay a tax on any fuel you sell.

Likewise, if you import or export goods, you may need to pay certain duties. Speak to your accountant about any other taxes or duties you may need to withhold or pay.

How to Make Your LLC Federal Tax Election

LLCs do not have a dedicated federal tax rate or filing form. Instead, these business entities are allowed to choose what tax structure their LLC will use. We strongly recommend that you talk to an accounting or tax professional when making this decision. However, here are some general guidelines that will help you know what to expect and how to plan for your federal LLC taxes. 

Sole Proprietor or Partnership: Most common for LLCs with revenue that fails to significantly surpass the owners’ potential salary. There are different federal filing forms for sole proprietors (Form 1040) and partnerships (Form 1065), however. This reflects the fact that sole proprietors automatically have their entire LLC income pass-through, while partnerships must account for multiple members with potentially different interests or ownership units.

S Corp: Most common for LLCs with moderate income. An S corp tax election is made with Form 2553. Take advantage of a salary plus pass-through distributions to reduce federal self-employment tax. Consider state-level consequences of an S corp election. Some states tax S corps at a higher rate than sole proprietors and partnerships and/or have a variable state income tax rate. 

C Corp: Most common for LLCs with significant net income in which personal income tax rates may be higher than the standard 21% corporate tax rate. Also common for LLCs planning to reinvest a significant portion of revenues back into the business. An C corp tax election is made with Form 8832.

Federal Income and Payroll Tax Filing Due Dates

The last day to file federal LLC tax returns is March 16th, 2026 for S corps and partnerships and April 15th, 2026 for sole proprietors and C corps.

Annual Tax Return Filing Deadlines for LLCs 

Here are the primary forms used to file federal tax returns, based on your business entity tax election. Additional forms may be necessary, however. Partnerships and S corps, for example, will need to file a Schedule K-1 for each LLC member to report their individual share of losses, income, and deductions. If you have employees or contractors, you’ll need to file W-2s and 1099s, respectively. You may also need to talk to a tax pro to make determinations on other filing requirements, like the sale or exchange of business property.

* For an LLC to be treated as an S Corp or C Corp, it must file Form 2553 or Form 8832 no later than 75 days from the start of the taxable year. So, assuming your LLC uses the calendar year for its 2025 tax filing, Form 1120-S is due on March 16th, 2026. But to file as an S corp, you would need to have filed Form 2553 by March 17th, 2025.

** Or the first business day after the 14th of the month.

Pro Tip: A free 30-minute tax consultation can uncover other smart tax strategies that require prior year planning.

Estimated Tax Reporting Deadlines

* Or the first business day after the 14th of the month.

Note: Some states also require estimated tax payments and reporting to avoid end-of-year penalties.

Quarterly Payroll Reporting Deadlines

Note: Full payroll reporting occurs on a quarterly schedule, but employers must also make monthly or semiweekly payments depending on how much they owed during the lookback period.

Fast Tax Filing Solutions

Whether you’re a chronic procrastinator or life events got in the way, some people realize at the last-minute that they need to file quarterly or annual tax returns for their LLCs, or file an S corp tax election to find additional tax savings. 

If your LLC has been doing its bookkeeping and still has at least a couple days to file, you may be okay with the assistance of an online filing service. If you just don’t see any way to meet the filing deadline, here are some things to consider.

Focus on Submitting a Payment: In many cases, sending the IRS an estimated payment is more important than meeting the filing deadline. For example, with federal unemployment insurance taxes (Form 940), you automatically get a 10-day grace period for submitting the form IF you’ve successfully paid all due taxes to the IRS. There are four potential ways to submit this type of payment.

• Electronic Federal Tax Payment System (EFTPS)

• IRS Direct Pay

• Electronic Funds Withdrawal (EFW)

• Mail a Check or Money Order (some restrictions apply)

File for an Extension (if possible): Quarterly forms 940 and 941 do not allow for a filing extension. Estimated tax payment penalties are likewise based on the amount owed, rather than filing the form by the deadline. With annual tax returns, an extension is more common and more commonly advised by the IRS. However, if you don’t pay estimated taxes with an annual filing extension, you’re also likely to face greater penalties and interest in the long run. 

Be Prepared to File Amended Returns: Here’s another common scenario—In the rush to meet a filing deadline, you inadvertently submit inaccurate or incomplete tax returns. Generally speaking, it’s better to file and then amend your returns with updated information, but if you have any reason to doubt the accuracy of your tax returns, it’s smart to have a tax professional review them as soon as possible, even if you’ve already filed. 

More Federal Tax Questions for LLCs

Do I need to file if my LLC has no income?

If your LLC has no income at all, it probably isn’t required to file federal tax returns. However, it’s beneficial to do so if you have operating expenses. While the IRS isn’t going to reimburse the losses directly, most expenses can be carried forward to future years. In some cases, these expenses can also be used to offset W-2 income. 

Where can I find a list of common deductions for LLCs?

We’re not going to pretend we can list every hypothetical scenario in which an LLC expense deduction may or may not be qualified and under which statute. But we know it’s a common question LLC owners have and for good reason. Filing and paying taxes is bad enough. You don’t want to overpay on top of it. Even a single missed deduction can cost you more than 

With that in mind, here’s a quick cheat sheet you can use to estimate the kinds of deductions your LLC may qualify for. 

Are there different rules for passive LLC members?

Yes. In most cases, passive LLC members can’t deduct net losses from the company in the same way that active members can. This is known as passive activity loss limitation. But you may also want to consider whether you’re truly a passive member that hasn’t materially contributed to the company. This is another reason to talk to a tax professional.