Bookkeeping for LLCs

An LLC is a legal entity, not a tax classification. Default tax treatment depends on whether you're single-member (Schedule C) or multi-member (Form 1065 partnership).

Single-member LLC bookkeeping

  • Separate business bank account is non-negotiable.
  • Track owner contributions and draws as equity, never expenses.
  • COA should map cleanly to Schedule C line items.
  • Set aside 25–30% of net profit for quarterly estimated taxes.

Multi-member LLC bookkeeping

  • Separate equity account per member.
  • Profit/loss allocation per the operating agreement.
  • Guaranteed payments tracked separately.
  • Form 1065 + K-1s due March 15.

When to elect S-Corp

Typically once net profit exceeds ~$70,000/year. Read S-Corp vs LLC and bookkeeping for S-Corps.