I started a LLC in 2016 that did not generate any income nor expenses. The LLC is still active is this something I need to add on my taxes?

nathaniel1green — Fri, 07 Jun 2019 22:48:20 GMT

It really depends on what type of LLC it is. If it is a s...

LeeM — Fri, 07 Jun 2019 22:48:21 GMT

It really depends on what type of LLC it is. If it is a sole-member LLC reported on your Schedule C, then no you do not. BUT make sure you don't have an depreciable assets or you should report the depreciation expense in 2016 as a deduction. LLC tax filing requirements depend on the way the LLC is taxed. An LLC may be disregarded as an entity for tax purposes, or it may be taxed as a partnership or a corporation.

Please see below for more detailed information:

Sometimes a limited liability company has a year with no business activity. A newly formed LLC might not have started doing business yet, and an older LLC might have become inactive without being formally dissolved.

But even though an inactive LLC has no income or expenses for a year, it might still be required to file a federal income tax return.

Tax Elections for LLCs

If an LLC only has one owner (known as a “member”), the Internal Revenue Service automatically disregards it for federal income tax purposes. The LLC’s member reports the LLC’s income and expenses on his or her personal tax return.

If an LLC has two or more members, the Internal Revenue Service automatically treats it as a partnership. The LLC files an informational partnership tax return and the members also report the LLC’s income and expenses on their personal tax returns.

However, an LLC can change these default classifications and choose to be taxed as a corporation. To do this, the LLC must file Form 8832 with the Internal Revenue Service. The LLC may make this election when it is formed, or it may elect to change its tax classification at a later date.

Filing Requirements for Disregarded Entities

An LLC that is not considered a separate entity for federal income tax purposes is taxed in the same way as a sole proprietor: the LLC’s income and expenses are reported as self-employment income on Schedule C of the member’s personal tax return. You are required to file Schedule C if your LLC’s income exceeded $400 for the year.

If a one-member LLC did not have any business activity and does not have any expenses to deduct, the member does not have to file Schedule C to report the LLC’s income. However, the member will still have to file a personal tax return if he or she had other income, and may have to file a Schedule C if there was self-employment income from another business.

Filing Requirements for an LLC Partnership

An LLC that is taxed as a partnership is subject to the same federal income tax return filing requirements as any other partnership. The LLC must file an informational partnership tax return on tax form 1065 unless it did not receive any income during the year AND did not have any expenses that it will claim as deductions or credits.

Thus, an LLC with no business activity that is taxed as a partnership is not required to file a partnership tax return unless there are expenses or credits that the LLC wants to claim.

LLC Tax Filing Requirements for an LLC Corporation

Corporations have different tax filing requirements than either disregarded entities or partnerships. All corporations are required to file a corporate tax return, even if they do not have any income.

Thus, if an LLC has elected to be treated as a corporation for tax purposes, it must file a federal income tax return even if the LLC did not engage in any business during the year.

Even if your LLC has no business activity, it is important to understand your LLC tax filingstatus and whether it is obligated to file a federal income tax return. Filing required returns on time can help your LLC avoid fines and penalties.

Exactly what I was looking for, Thanks!

nathaniel1green — Fri, 07 Jun 2019 22:48:23 GMT

Exactly what I was looking for, Thanks!

Re: It really depends on what type of LLC it is. If it is a s...

anchng — Sat, 16 Apr 2022 00:56:15 GMT

"Thus, an LLC with no business activity that is taxed as a partnership is not required to file a partnership tax return unless there are expenses or credits that the LLC wants to claim."

If the LLC is TERMINATED during a year in which it has no income or expenses, does this change the fact that it does not have to file a return? Or is there a special requirement for LLC's to file a final return regardless of income/expenses?

Thanks!

topic Re: It really depends on what type of LLC it is. If it is a s... in Business & farm

I started a LLC in 2016 that did not generate any income nor expenses. The LLC is still active is this something I need to add on my taxes?

It really depends on what type of LLC it is. If it is a s...

Exactly what I was looking for, Thanks!

Re: It really depends on what type of LLC it is. If it is a s...