Single Member LLCs Filing a Form 568
Since the tax year 2022 filing season is underway for the small business community, we would like to remind our single member limited liability company (SMLLC) clients that the Form 568 is due to be filed as well. This is to refresh the information known, a SMLLC company is disregarded for federal tax purposes, it is also generally disregarded for California tax purposes. However, the Form 568 must be filed with the State to stay in compliance.
The income and expenses of the SMLLC are reported directly on the return of the SMLLC’s owner, including on a Schedule C (Form 1040) for an SMLLC owner who is an individual.
To be informed, that the California law states; The separate existence of the business entity that is disregarded for federal tax purposes is not disregarded for California tax purposes for the followings:
- LLC tax
- LLC fee
- LLC return filing requirement
As for return filing, generally, a disregarded SMLLC must file a tax return (Form 568) by the same deadline applicable to the owner’s tax return. California does grant an automatic extension of time to file a return as well. Please keep in mind that: An extension of time to file is not an extension of time to pay the LLC tax or fee.
In summary, SMLLC taxpayers should be informed that a disregarded SMLLC is required to:
- File a tax return (Form 568)
- Pay the LLC annual tax
- Pay the LLC fee (if applicable)
Should you inquire about disregarded SMLLC company reporting requirements and compliance, please contact our office at 310.666.0244
Reference:
https://www.ftb.ca.gov/file/business/types/limited-liability-company/single-member-llc.html
https://www.ftb.ca.gov/file/business/types/limited-liability-company/index.html