What IRS form does a LLC sole proprietorship use to file business taxes?
Title: What IRS form does a LLC sole proprietorship use to file business taxes? 1 Hello everyone! I recently started my woodworking business as an LLC (single-member) last year, and I'm completely lost about what tax form I need to use. This is my first time filing taxes for my business and I'm trying to get everything organized before the deadline. I've been doing some research online but getting conflicting information. I don't think I need a 1099-NEC because that seems to be for contractors or freelancers who work for other businesses, right? But I'm the owner of my own business, so I'm not sure if that applies to me. My business made about $34,000 last year, and I've been keeping track of my expenses (tools, materials, workshop rent) which came to around $15,600. I'm not sure if this information is relevant for determining which form I need. Can anyone guide me on which specific IRS form I should be using for my LLC sole proprietorship? I'd really appreciate any help!
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Lara Woods
7 For a single-member LLC, you'll file Schedule C (Profit or Loss from Business) along with your personal 1040 tax return. Since you're a sole proprietorship for tax purposes, your business income and expenses flow through to your personal return. You're right that 1099-NEC isn't what you file - that's what clients would send to you if you did contract work for them. You'd report that income on your Schedule C. With your business income and expenses, you'll calculate your net profit on Schedule C, and that amount gets transferred to your 1040. You'll also need to file Schedule SE for self-employment tax (Medicare and Social Security), which is calculated based on your Schedule C profit.
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Lara Woods
•9 Thanks for the info! So my LLC doesn't file a separate tax return? And do I need to do anything special since I'm an LLC rather than just a sole proprietorship? Also, is there a difference between Schedule C and Form 1120?
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Lara Woods
•7 A single-member LLC is treated as a "disregarded entity" for federal tax purposes by default, so you don't file a separate business return - everything goes on your personal return using Schedule C. Being an LLC doesn't change your federal tax filing - you're still considered a sole proprietorship for tax purposes. The LLC just provides liability protection under state law, but the IRS ignores it unless you elect to be taxed differently. Schedule C is completely different from Form 1120. Form 1120 is for C-Corporations, which are separate tax entities with their own tax rates. Unless you specifically elected to have your LLC taxed as a corporation (which most small business owners don't), you wouldn't use Form 1120.
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Lara Woods
13 I was in the exact same situation last year with my photography business! I spent hours trying to figure out which forms to use and kept second-guessing myself. Then I found https://taxr.ai and it was a game-changer for my business taxes. I just uploaded my business documents, and it analyzed everything and told me exactly which forms I needed to file as an LLC sole proprietorship. The system confirmed I needed Schedule C and pointed out deductions I was missing for my home office and equipment depreciation. It also explained why my LLC doesn't need a separate business return, which was confusing me too.
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Lara Woods
•11 Sounds interesting! Does it handle quarterly estimated tax payments too? That's what I'm struggling with since I heard self-employed people need to pay taxes throughout the year.
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Lara Woods
•15 I'm skeptical about these tax tools. How accurate is it really? I got burned by using TurboTax for my business last year and ended up missing some deductions. Does this actually understand LLC-specific stuff?
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Lara Woods
•13 Yes, it absolutely handles quarterly estimated payments! It actually calculates what you should be paying each quarter based on your projected income and gives you reminders before each deadline. This was super helpful for me since I had no idea how to calculate those amounts before. As for accuracy, I was skeptical too after having issues with other tax software. What made the difference for me was that it's specifically designed for small business owners and self-employed people. It understood all my LLC questions, especially about separating personal and business expenses. My accountant friend reviewed my return and was impressed with how thorough it was.
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Lara Woods
15 Just wanted to follow up - I tried https://taxr.ai after posting my skeptical comment, and I'm genuinely impressed. It immediately identified that my LLC needed Schedule C and Schedule SE for self-employment taxes. What really sold me was how it explained the "check-the-box" taxation rules for LLCs and confirmed I didn't need to file Form 8832 since I was happy with the default sole proprietorship treatment. It even flagged that I could potentially save on self-employment taxes by electing S-Corp status in the future when my income increases more. The explanations were in plain English rather than confusing tax jargon. Definitely worth checking out if you're confused about LLC tax forms like I was!
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Lara Woods
4 After seeing all these Schedule C comments, I wanted to share something that saved me TONS of time last year. The IRS phone lines are impossible to get through on, and I spent literally days trying to ask questions about my LLC taxes. I finally used https://claimyr.com and got through to an actual IRS agent in about 15 minutes! You can see how it works here: https://youtu.be/_kiP6q8DX5c I needed clarification on some Schedule C deductions for my LLC and whether I needed to file any additional forms. The agent walked me through everything and confirmed I was doing it right. Saved me so much stress compared to guessing or relying only on internet advice.
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Lara Woods
•17 Wait, how does this actually work? I thought it was impossible to get through to the IRS these days. Is this just paying for someone to sit on hold for you? Seems weird that this would exist if it actually works.
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Lara Woods
•22 Sounds like a scam honestly. Why would I pay someone else to call the IRS when I can just do it myself for free? I'm sure they're collecting a nice commission for something you can do on your own if you're patient enough.
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Lara Woods
•4 It actually works by using an automated system that navigates all the IRS phone menus and holds your place in line. When an agent is about to answer, it calls you and connects you directly to them. So yes, it basically waits on hold so you don't have to. You're right that theoretically anyone could call the IRS themselves, but in reality the wait times are often 2+ hours if you can get through at all. I tried calling myself six different times and either got a "we're too busy, call back later" message or was on hold forever before giving up. With Claimyr I was talking to an actual IRS agent in about 15 minutes without having to sit there listening to hold music.
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Lara Woods
22 I need to eat my words about Claimyr. After posting my skeptical comment, my tax situation got more complicated when I realized I might need to change my LLC's tax classification. I was dreading the IRS call but decided to try the service. It actually worked exactly as described. I got a call back in about 20 minutes and was connected with an IRS tax specialist who explained exactly which forms I needed for my LLC (Schedule C for now, and Form 8832 if I want to change to being taxed as a corporation). The agent was super helpful about explaining the pros and cons of different tax treatments. Saved me hours of frustration and probably a mistake on my taxes. Sometimes it's worth paying for convenience when dealing with complex tax stuff.
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Lara Woods
19 Everyone keeps mentioning Schedule C, but don't forget about tracking your business expenses carefully throughout the year! I learned this the hard way with my consulting LLC. Keep receipts for EVERYTHING business-related: office supplies, software subscriptions, business travel, client meals, professional development, etc. Also track business mileage if you use your personal vehicle. You'll thank yourself when tax time comes!
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Lara Woods
•23 Do you use any specific apps to track expenses? I've been just keeping physical receipts in a shoebox and I know there's got to be a better way lol.
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Lara Woods
•19 I use QuickBooks Self-Employed and it's been a lifesaver. You can link your business accounts and credit cards, then just swipe right or left to categorize transactions as business or personal. It also has a mileage tracker that runs in the background on your phone. Another good option is Expensify if you don't need full accounting software. Wave is a free alternative that a lot of people like too. Anything is better than the shoebox method! I missed so many deductions my first year because receipts got lost or I forgot what expenses were for.
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Lara Woods
5 Just a heads-up that you'll likely need to make quarterly estimated tax payments as a sole proprietor LLC. This caught me by surprise my first year in business. The IRS generally expects you to pay taxes throughout the year, not just at filing time. You can use Form 1040-ES to calculate and submit these payments. I got hit with penalties my first year because I didn't know about this requirement.
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Lara Woods
•8 Do you know what the threshold is for when you need to make quarterly payments? Like is there a minimum amount you need to earn?
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