An LLC is a legal wrapper, not a tax status. How you keep books depends on how the LLC is taxed.
Single-member LLC
Taxed as a sole proprietor by default. Books are the same as a Schedule C business: revenue, expenses, owner draws. The one thing that matters more is keeping the LLC's money separate, because commingling is how liability protection gets pierced.
Multi-member LLC
Taxed as a partnership (Form 1065). Books add capital accounts per member: contributions, share of profit, distributions. Guaranteed payments to members are an expense. Keep the operating agreement handy; your accountant will need the profit split.
LLC taxed as an S corp
You become an employee. Reasonable salary runs through payroll; the rest comes out as distributions. Books track officer compensation, payroll taxes and distributions separately. See bookkeeping for S corps.
Records every LLC should keep
- Separate bank account and card in the LLC's name.
- Formation documents, EIN letter, operating agreement.
- Annual state filings and fees (categorized as taxes and licenses).
- Owner contributions and draws recorded as equity, never as income or expense.