If i have an LLC do I need to include it on my personal income tax return?

[JohnW222]

Yes, if it was a single-member LLC and it had any business activity during the year. 

If there was no business activity, then there's nothing to file or report.

For tax purposes, the IRS considers single-member LLCs to be sole proprietorships, with profits and losses to be reported on Schedule C with Form 1040.

[RCPW]

Hello,

I have the same concern.

I have a full time job and a LLC since last year. I made some NP on the business, but never took any money out.

Do I still have to claim this on the personal tax return even if all the NP is still in the business bank account?

Thanks

[BillM223]

It does not matter if you have not transferred any funds from the business account to your personal account - your business is still subject to taxation.

If the LLC is owned by you alone (or by you and your spouse in a community property state), then as JohnW222 noted above, you report this as a "disregarded entity" using Schedule C on the 1040. "Disregarded entity" means that the IRS in this case is going to "disregard" that you have an LLC and instead let you file it as if it were a sole proprietorship.

Note that if there are other owners of the LLC (other than you or you and your spouse as I noted above), then you would normally file a partnership return (1065) or a corporate return (1120 or 1120S) depending on whether your notified the IRS that you wanted to be taxed as a corporation (the default if partnership).

[RCPW]

Thank you, Bill.

One more.

It is owned by me alone.

It is a little bit confusing.

I claim the NP in the tax return, pay obviously taxes on it, and then withdraw it to my personal account after it has been taxed as income. Would this be the best way?

[BillM223]

Your Schedule C income from your LLC is basically already your income. The net income from Schedule C will be added to your other income (from W-2s and other sources) and then all of it is taxed at one time.

The difference about your LLC income is that you are permitted to take qualified business expenses as deductions against that income (this happens on Schedule C) and then TurboTax will calculate the self-employment taxes that you owe (this happens on Schedule SE). 

The self-employment taxes are added to your income taxes for a single amount due.

So it doesn't make any difference when or whether you transfer the money from the business account to your personal account or not - you're reporting and paying taxes on everything all at once. You can transfer money from the business account to your personal account (often called an "owner's draw") at any time - it will not make any difference to your tax return.

[RCPW]

Thank you.

[BillM223]

You are most welcome - good luck with your business!