29 May I have an LLC I never used. What should I do with it?

Q. I opened an LLC to buy a rental home, but I never used the LLC. I just got a notice from the IRS. Even though the LLC didn’t do anything, did I really have to file something for it? There was no income or anything.
— Unsure

A. It’s a great question.

Opening an LLC, short for a Limited Liability Company, comes with some responsibilities.

These entities are used by people who want to protect themselves personally from business transactions that might go awry, said Bernie Kiely, a certified financial planner and certified public accountant with Kiely Capital Management in Morristown.

“If you operate a business in your own name, you are putting everything you own at risk,” he said.

An LLC is a legal entity created by each state, Keily said.

“You create the LLC by filing papers in your state’s capital,” he said. “You then apply with the IRS for a separate federal identification number.”

He said LLCs are known as “Disregarded Entities” because for tax purposes they are taxed on the owner’s 1040 on Schedule C. In a multiple-owned LLC, the LLC files a Partnership tax return, he said.

“Once an LLC has a federal identification number it should be included on your Schedule C or 1065 Partnership Income Tax Return, even if it had no income,” he said. “This is so the IRS can keep track of it and to show that it is still active.”

If you legally terminate a LLC that fact should be indicated on Schedule C or 1065, he said.

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This story was originally published in May 2026. 

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