Due to the protection it offers its owners from personal liability, Limited Liability Companies (LLCs) are a common type of corporate structure for small firms. For tax reasons, LLCs are often categorized as either corporations or disregarded entities. If your LLC is a corporation, you might be asking whether you need to send the LLC’s Corp a 1099 form.
Yes, you might need to send a 1099 form to your LLC’s Corp., to answer your query. You must submit a 1099 form to the LLC’s Corp if you paid them more than $600 for the services they provided. The same tax laws that apply to corporations are also applicable to LLCs that are categorized as corporations by the IRS since they are viewed as independent legal entities by the IRS.
By submitting Form 2553 to the IRS, an LLC can also choose to be taxed as an S-Corporation. An S-Corp is a unique kind of corporation that permits the company’s earnings, tax credits, and deductions to transfer to the shareholders’ individual tax returns. You won’t need to send a 1099 form to the corporation if your LLC chose to be taxed as an S-Corp. Instead, you must send each shareholder a Form K-1.
You might be asking if you can retrospectively file as an S-Corp if you missed the deadline to do so. The IRS must receive Form 2553 in order for you to retroactively file as an S-Corp. The form must be submitted within two months and fifteen days of the beginning of the tax year for which you want the election to be effective, among other conditions.
You risk fines if you don’t submit your S-Corp tax return by the due date. A late S-Corp tax return filing fee of $195 per shareholder per month, up to a maximum of 12 months, is assessed. The penalty may be much larger if the IRS finds that the late filing was the result of willful disregard for the requirements.
You might be asking if you require a new EIN if you are changing your LLC to an S-Corp. No, if you change your LLC into an S-Corp, you do not require a new EIN. When you submit an application to the IRS for S-Corp classification, you can utilize the same EIN that was given to your LLC.
In conclusion, you must send a 1099 form to the company if you paid your LLC’s Corp more than $600 for services provided. You won’t need to send a 1099 form to the corporation if your LLC has chosen to be taxed as an S-Corp, nevertheless. Keep in mind that there may be fines if you fail to file as an S-Corp before the deadline. Finally, if you change your LLC into an S-Corp, you do not require a new EIN.