USA LLC Tax question

[jaykhjr]

Hey everyone, I am new to this and really need some help. Two colleagues and I are starting a party rental and catering business. I know we need appropriate insurance, health certifications, and the paperwork to form an LLC. but, I have never done more than personal taxes for a part time job (I am a college student) Because we are all college students, and do not need the money to support ourselves or families for the time being, we are keeping all profits in the business (assuming we grow like we think we will) (I know that is a big assumption). My question is, do my personal taxes change? and how do I file taxes for the LLC. If would be extra helpful if someone could tell me all of the paperwork i would have to file, what I would be able to write off and what I wouldn't, and any other information specific to PA that I should know. Thank you so much, Jay

 

[ReesaMcKenzie]

Unless the LLC makes an election to be taxed as an S or C corporation, then you are a partnership for federal tax purposes. The LLC will file form 1065 information return due three months after end of tax year (typically 3/15). The 1065 will produce three K-1 forms that will tell each partners share of the net income or loss of the partnership. You will use the K-1 form to complete your own personal tax return. You will have income tax and self employment tax to pay on your share of the profits, whether they are distributed to you or not. If you are profitable, this means you will need to make estimated income tax payments throughout the year.

Here is a good place to start: Starting a Business

 

[jaykhjr]

Thank you! how do I estimate my income tax? and what about state/local?

 

[IRS Hitman]

You might find this link helpful. It has some basic tax set up instructions for new businesses and some handy links to IRS.gov pages you may find helpful.

First Steps for New Small Businesses, Start Right and Avoid IRS Debt

 

[jaykhjr]

Both websites are helping me alot! Thank you