How Maryland Multi‑Member LLCs Can Prepare for Tax Season (1065 or 1120‑S)

Maryland Multi‑Member LLC Tax Filing Guide: 1065 vs. 1120‑S (2025)

Preparing early helps Maryland multi‑member LLCs avoid penalties, reduce taxes, and deliver timely K‑1s to partners. Use this checklist whether you file as a partnership (Form 1065) or an S corporation (Form 1120‑S).

What to do now

• Confirm your tax classification and deadlines

  • Are you Partnership (Form 1065) or S corporation (Form 1120‑S)? Most calendar‑year returns for pass-through entities (PTE) are due March 15 (federal); extensions move to September 15.

  • PTEs are required to issue Schedule K‑1s to all members by the filing deadline.

  • Penalties for filing late are severe, so it's critical to be proactive.

• Clean up bookkeeping

  • Reconcile all bank/credit card accounts., including separating owner distributions from expenses.

  • Record partner capital, contributions, and distributions. If any loans between members/entity are involved, those need to be accounted for carefully.

  • Track partner/shareholder basis. Note that there are differences here between how S-corps/partnerships determine basis, so working with tax pro can help you navigate these.

  • For S corps, run reasonable compensation through payroll (not draws).

• Gather key documents

  • Prior‑year tax return

  • Operating agreement

  • EIN/IRS notices

  • Gather signed W‑9s to be used for filing 1099‑NEC for contractors (due Jan 31);

  • Payroll reports

  • Sales/use tax records

  • Other documents (not an exhaustive list): loan statements; fixed‑asset purchases (for Section 179/bonus), vehicle mileage logs, and home office details, etc

• Plan Maryland‑specific filings and taxes

  • Consider Maryland Pass‑Through Entity Tax (PTE) election for potential SALT cap workaround benefits.

  • Prepare to file Maryland PTE return (Form 510) if applicable and the SDAT Annual Report & Personal Property Return (Form 1) by April 15 to keep your LLC in good standing.

• Optimize cash flow and tax savings

  • Schedule year‑end adjustments, inventory and 1099 reviews.

  • Evaluate retirement plans (SEP‑IRA, Solo 401(k) for S‑corp owner‑employees), accountable plan reimbursements, and timing of income/expenses.

Conclusion

Avoid last‑minute stress, keep members informed with accurate K‑1s, and make smart Maryland PTE and payroll decisions. Contact Aventa Tax in Montgomery County, Maryland at 301-235-2724 or here for tailored guidance and business filing support for your multi‑member LLC (1065 or 1120‑S).

This information is for educational purposes only. Please speak with a tax professional for advice on your specific situation.