Form 1120 vs Form 1065: Which Return Does Your LLC File?

One of the most confusing aspects of US LLC taxation is figuring out which return to file. LLCs are flexible entities — the IRS treats them differently based on their structure and elections.

The decision tree

Step 1: How many members?

→ Single member → Go to Step 2

→ Multiple members → Go to Step 3

Step 2: Single-member LLC

Default: Disregarded entity. No separate return (report on owner's return).

• •US owner → Schedule C on Form 1040
• •Foreign owner → Form 1120 + Form 5472 (special rules for foreign-owned disregarded entities)

Did you file Form 8832 to elect corporate treatment?

• •Yes → Form 1120
• •No → Follow default above

Step 3: Multi-member LLC

Default: Partnership → Form 1065

Did you file Form 8832 to elect corporate treatment?

• •Yes → Form 1120
• •No → Form 1065

Summary table

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Key differences between 1120 and 1065

Form 1120 (Corporation):

• •Entity pays its own tax at 21% flat rate
• •Distributions to owners are taxed again (double taxation)
• •Simpler for foreign-owned single-member LLCs

Form 1065 (Partnership):

• •No entity-level tax (pass-through)
• •Each partner reports their share on their personal return
• •Requires Schedule K-1 for each partner
• •Due earlier (March 15 vs April 15)

What if you filed the wrong return?

It happens more often than you'd think. If you filed Form 1120 when you should have filed Form 1065 (or vice versa), work with a CPA to:

• •File an amended return on the correct form

• •File Form 8832 if an entity classification election is needed

• •Address any penalties with a reasonable cause statement