One of the most often asked issues regarding taxes and LLCs is whether or not an LLC must file taxes if it receives no income. This question does not have a simple answer because it is dependent on a number of variables.
It’s crucial to remember that LLCs are not taxed separately from their owners in the first place. Instead, the LLC’s profits and losses are distributed to its owners and reported on their individual tax returns. As a result, if the LLC experiences a loss, there will be no income to pass through to the owners and no taxes due.
However, even if the LLC doesn’t make any money, it might still need to file a few tax documents. For instance, regardless of whether the LLC has any income, it will need to file a corporate tax return (Form 1120) every year if it chose to be taxed as a corporation. Additionally, the LLC might need to submit an annual report or pay specific fees depending on the state in which it is registered.
It’s also important to keep in mind that even if an LLC doesn’t make any money during the first year it’s in business, it can still be required to submit a Form 1065, Informational Tax Return, to the IRS. Even if there is no revenue subject to taxation, the LLC must nonetheless report its income and expenses on this form. To guarantee that the IRS is aware of the LLC’s existence and can monitor its financial activity right once, this provision was put in place.
You can serve as your own registered agent for your LLC in Illinois, yes. An individual or organization named as the LLC’s registered agent will receive court summonses and other legal documents on the company’s behalf. Although many LLCs opt to use a reputable registered agent service, doing so is not legally required in Illinois.
It’s crucial to remember that acting as your own registered agent has drawbacks. For instance, if you are serving as the registered agent and are sued, you can receive legal paperwork in front of your staff or clients, which can be unpleasant and bad for the reputation of your company. Additionally, you run the risk of missing deadlines and endangering your LLC if you are not constantly accessible to receive legal paperwork during business hours.
In conclusion, LLCs may nevertheless be needed to file specific tax forms or reports even if they have no income and are not required to file taxes. Additionally, you can serve as your own LLC’s registered agent in Illinois, but there may be drawbacks to this, so it’s crucial to examine the advantages and cons before deciding.