Sole member LLC reporting income on 1040 Schedule C and state reporting

Forum|Forum|5 years ago
February 16, 2021
6 replies
56 views

If a sole member LLC reports income on 1040 Schedule C, does it need to file a IL 1065 to pay replacement tax in Illinois?

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Best answer by Terry53029

No, Here are IL instruction:

Filing requirements. You must file Form IL-1065, Partnership Replacement Tax Return, if you are a partnership, as defined in Internal Revenue Code (IRS), Section 761(a)

Camp1040

Level 10

I am not familiar with IL taxes, but if you are filing a sole proprietor for the federal return, why would you file a partnership for the state?

C

cpacolleenAuthor

Level 2

The IRS allows a sole member LLC to file schedule C. I don't know if Illinois also allows income from a sole member LLC to be reported on IL form 1040 because Illinois imposes a 1.5% personal property replacement income tax on all S corporation and LLC “partnership” business income derived in the state of Illinois.

Camp1040

Level 10

A single member LLC is not a partnership although.

T

Terry53029

Answer

Intuit Community Champion

No, Here are IL instruction:

Filing requirements. You must file Form IL-1065, Partnership Replacement Tax Return, if you are a partnership, as defined in Internal Revenue Code (IRS), Section 761(a)

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