LLC Tax Virginia (income, income tax, law)

[mormegil27]

Looked around in Google, unable to find good info. I need to report income tax for an LLC, looking for some good links that help explain the situation. The problem: federal rules require LLC tax to be reported on Schedule C, while VA appears to require it to be reported separately as corporate tax. But the VA return is based on the Federal return, which has the LLC tax already included. These rules are mutually exclusive.

[spencgr]

tax accountant?

[airjay75]

For U.S. federal tax purposes, LLCs can actually be treated as disregarded entities (and, generally reported on Schedule C), partnerships, or corporations. By default, if an LLC has one owner, it would be a disregarded entity and, if multiple owners, a partnership. Corporate status is generally something you would elect and could be so elected with one owner or with multiple owners. Generally, state taxation follows the federal treatment, although I can't speak to every state or to Virginia in particular since I am really not a state tax law person nor do I have any direct experience with Virginia's treatment of LLCs. I would be surprised if an LLC taxed as a disregarded entity for federal purposes was subject to corporate income tax in Virginia, but I can't say for certain. You may want to consult a tax accountant to make sure you're not overlooking anything, especially if you're talking about significant amounts of income and/or deductions.