Filing Business Taxes for Your LLC: A 2026 Guide

Tax season for 2026 is right around the corner, and it’s common for owners of LLCs to start feeling the pressure of preparing and getting records in order. Fortunately, the right strategies and guidance can help you feel ready going into it. 

Whether it’s your first time filing business taxes for your LLC or you’ve done it before, we’ve created this guide to help you prepare so you feel confident in your decisions. Keep reading to find out how to file LLC taxes and tips on tax prep services for your small business. 

Understanding LLC Tax Classifications

For federal income tax purposes, LLCs have flexible tax classification options. By default, LLCs are typically classified based on the number of owners. However, they can elect a different classification with the IRS for tax purposes. The four different classifications are sole proprietorship, partnership, S corporation, and C corporation. 

Choosing the appropriate tax classification is important for LLCs because it affects tax liabilities, reporting requirements, and overall financial strategy. Essentially, each tax classification has its own rules, so choosing the right one for your business situation is important to reduce tax liabilities where you can. 

What Tax Classification Does Your LLC Have?

It’s common for small business owners to wonder what classification is the best fit for their LLC, so let’s review some details about each one to help early on in your decision-making process. 

Sole Proprietorship

By default, LLCs with one owner are considered a sole proprietorship. In this case, the owner would report all business-related income and expenses on their personal tax return. This is also known as the business being a disregarded entity, where the business is ignored for tax filing purposes, and profits and losses are reported on the owner’s personal tax return. 

Partnership

Most multi-member LLCs (2+ members) are treated as a partnership by default. In this case, each partner would report their share of business-related profits and losses on their personal tax return. 

C Corporation

LLCs can elect to be taxed as a corporation by filing IRS Form 8832. A corporation is taxed as a separate business entity at a flat federal rate. 

C corporations may be subject to what’s known as “double taxation.” This refers to when the profits and losses for the business are taxed at the flat corporate tax rate, and then any dividends paid to shareholders also need to be reported on their personal tax returns, where they’ll pay personal income taxes on that money.  

S Corporation

S corporations elect to pass business profits, losses, deductions, and credits through to their shareholders for tax filing purposes. Each shareholder would report their portion of the earnings and losses on their personal income taxes. 

To elect an LLC as an S corporation, you would need to submit IRS Form 2553 and meet certain criteria, such as: 

• Being a domestic corporation
• Having only allowable shareholders
• Having no more than 100 shareholders
• Having only one class of stock
• Not being an ineligible corporation, such as certain financial institutions, insurance companies, or domestic international sales corporations

Talking to a professional tax preparer can help you decide if you meet these criteria or not.  

How Do Pass-Through Entities Affect Your Taxes?

Sole proprietorships, partnerships, and S corporations are all known as pass-through entities for tax filing purposes. It means that an owner or shareholder passes a business through to their personal income taxes rather than reporting the business as a separate entity. It helps avoid double taxation that you would face if you were filing as a C corporation. 

If you’re unsure which tax classification is right for your situation, it’s best to talk to a professional tax preparer about it. They can help review your business structure, earnings, losses, and potential deductions to help you optimize your tax situation and make an educated classification decision. 

What Business Tax Returns Does Your LLC Need to File?

LLC filing requirements will differ depending on your business classification. The forms you’ll need to fill out for each classification are: 

• Sole proprietorship: Sole proprietors will typically file using IRS Form 1040 with Schedule C. If the business is farming, you’d use Schedule F instead. You will also likely need to file Schedule SE for self-employment tax that covers Social Security and Medicare. 
• Partnership: Partnerships will need to fill out an informational return that shows business profits and losses using IRS Form 1065. Then, the LLC would provide each partner with a Schedule K-1 detailing their share of profits, losses, deductions, and credits that they’d report on their personal 1040 returns. 
• C corporation: A C corporation will report business income as a separate entity using IRS Form 1120. 
• S corporation: An S corporation would file using IRS Form 1120-S and then provide each shareholder with a Schedule K-1, detailing their share of business profits and losses to report on their personal income tax returns. 

When Are LLC Tax Returns Due in 2026?

Business tax deadlines differ depending on your business classification. LLC tax filing deadlines in 2026 are: 

• Sole proprietorship: April 15th, 2026
• Partnership: March 16th, 2026
• S corporation: March 16th, 2026
• C corporation: April 15th, 2026

If you need more time to fill out your tax paperwork, you can file for an automatic 6-month extension with the IRS. Sole proprietorships, partnerships, and S corporations would use IRS Form 4868 to file for an extension, and C corporations would use Form 7004. 

However, it’s important to note that an extension just gives you more time to fill out your tax paperwork. You’d still need to make an estimated payment for how much you expect to owe before the deadline. 

When you need help filing more efficiently to meet the tax deadline or help filing for an extension, working with a professional tax preparer can make the process much easier. We offer remote tax preparation services at Milestone that can assist you throughout the process. 

When Do You Need To Pay Quarterly Estimated Taxes?

LLCs that expect to owe $1,000 or more also generally need to make quarterly estimated tax payments to avoid a penalty. The upcoming deadlines for quarterly estimated tax payments for the 2026 tax year are: 

• April 15th, 2026 
• June 15th, 2026 
• September 15th, 2026
• January 15th, 2026

Professional tax preparers can also provide you with year-round support to help you plan for quarterly estimated payments, ensure you meet the established deadlines, and continue to work with you to optimize your tax situation as much as possible throughout the year. 

How To Prepare for Tax Season

When you’re working with business taxes, you’ll want to ensure you’re keeping your records organized year-round. That way, you have all your records in check when you’re making quarterly payments or filing annual tax returns. 

First, you want to make sure you have an accurate bookkeeping process in place. You should be recording all your income and expenses as they occur in an organized recordkeeping system, such as established accounting software. 

Then, reconcile accounts periodically, comparing bank and credit card statements against your internal records to spot and fix any discrepancies. 

It’s also a good idea to plan for your LLC’s classification ahead of time. It’ll help you calculate a more accurate estimate of the quarterly payments you should be making and help you decide how to optimize your tax situation as much as possible. 

What Records Should You Gather Before Filing?

Important records and documents you should gather before filing taxes for your LLC include: 

• Income records, such as invoices sent to clients, bank deposits, cash register tapes, and Form 1099-NECs you’ve received. 
• Expense records, such as receipts, credit card statements, or invoices for business-related purchases. 
• Asset records for any property, machinery, or equipment sales or purchases you made for your business. 
• Payroll records (if you have any employees), including W-2s issued, and your records of quarterly payroll tax returns filed. 

What Business Deductions Reduce Your Taxable Income?

Some common LLC deductions that may help reduce your taxable income include: 

• Payroll and contractor expenses
• Employee benefits
• Rent and utilities
• Office supplies and equipment
• Business insurance
• Marketing and advertising
• Travel expenses
• Vehicle expenses
• Startup and organizational costs
• Qualified business income (QBI) deduction

Whether you can deduct any ordinary or necessary business expense will differ depending on your business situation, so it’s important to carefully review tax laws to ensure you’re deducting appropriate expenses and amounts. A professional tax preparer will be able to help you review expenses and make appropriate deductions based on your situation. 

Common LLC Tax Filing Mistakes To Avoid

Common tax filing mistakes for LLCs that you should avoid are: 

• Using the wrong LLC tax forms based on your business classification
• Not choosing the right tax classification based on your current business situation, which could result in paying more taxes than you need to
• Misclassifying employees as independent contractors, which could result in penalties
• Inaccurate or incomplete recordkeeping that could increase the time it takes you to file and cause missed expenses or profits you should report
• Not separating personal and business finances, which can lead to reporting errors when you file your taxes
• Missing filing deadlines or quarterly tax payment deadlines
• Overlooking potential deductions or deducting unqualified expenses
• Neglecting to pay state or local taxes

Mistakes when filing taxes for your LLC can be costly or lead to penalties, so it’s important to maintain an accurate process throughout and review tax laws carefully. 

If you ever feel like filing your own taxes is too time-consuming, overwhelming, or if you’ve encountered a complex tax situation, working with a professional tax preparer can help you navigate it effectively. We offer services that can help at Milestone. 

How Milestone Can Help With Your LLC Tax Filing

At Milestone, we offer remote tax preparation services to help with LLC and small business tax filing. Whether you just need help filing your annual tax returns or want personalized year-round support, our professional tax preparers are here to help you optimize your tax situation as much as possible. 

We also offer many other types of business support, such as bookkeeping, accounting, human resources, and fractional CFO services to help with many common small business needs. 

Want to learn more about how Milestone can help you prepare for tax season? Contact us today to learn more.