How to dissolve an LLC with the state and the IRS
Dissolving an LLC takes more than stopping work: the company has to be dissolved with the state and its IRS account closed, or state fees and taxes keep accruing. We dissolve LLCs in any state from $500: articles of dissolution, closing the EIN account with the IRS, payroll and sales tax deregistration, and final state filings.
When to dissolve an LLC
Why an LLC has to be dissolved properly
The state keeps charging
As long as the LLC is on the state's records, the state expects reports and payments. In California an LLC owes the $800 tax for every year until a certificate of cancellation is filed; in Delaware it owes $400 for every year it is active on the records.
The IRS account won't close itself
The IRS closes a business account only on the owner's letter, and only after all required returns are filed and taxes paid.
Administrative dissolution isn't closing
If reports stop, the state may administratively dissolve the company, but that doesn't close the IRS account.
The last year needs a return too
For the year you close, the company files its last return: Form 1065, 1120-S or 1120 with the final return box checked, or Schedule C on the owner's 1040 for a single-member LLC.
What our LLC dissolution service includes
How to dissolve an LLC: 4 steps
The order depends on the state and on whether the company had employees or collected sales tax. We map it out before any work starts.
Review and plan
We check where the company is registered, what registrations it has and which returns are still due. You get the price and the state fee before any work starts.
The last period
We check that everything for the last period is done: final wages and payroll filings, the last sales tax return, and Forms 1099-NEC for contractors for the year you close.
State filing
We file the dissolution document. Some states first require proof that state taxes are paid: in Texas, for example, a Certificate of Account Status from the Comptroller is attached to the Certificate of Termination.
Final return and IRS letter
We prepare the company's last return and send the IRS a letter closing the business account. If the LLC is taxed as a corporation, we file Form 966 within 30 days of the decision to dissolve.
Company dissolution — from $500. Final tax returns are billed separately at list price: Form 1065 — $450, Form 1120-S — $450, Schedule C on a personal Form 1040 — from $300. State fees are not included. See all prices →
What to prepare
LLC dissolution FAQ
How do you dissolve an LLC?
An LLC is closed in three places: with the state (the dissolution document and final filings), with its tax registrations (payroll and sales tax), and with the IRS (a final return and a letter closing the business account). The order depends on the state, and we map it out for your company.
How much does it cost to dissolve an LLC?
From $500: articles of dissolution, closing the EIN account with the IRS, payroll and sales tax deregistration, and final state filings. Final tax returns are billed separately at list price, and so is the state fee.
What happens if I just stop using the LLC?
The company stays on the state's records, and the state keeps expecting reports and payments. For example, a California LLC that stopped operating in 2025 but never filed a certificate of cancellation owed the $800 tax for 2026 by April 15, 2026 — and it will owe it again for 2027.
How do I close the EIN and the IRS business account?
Send the IRS a letter with the company's full legal name, EIN, address and the reason for closing; if you kept the EIN notice, enclose a copy. The IRS closes the account only after all required returns are filed and taxes are paid.
Which returns are due for the final year?
The company's last return: Form 1065 for a multi-member LLC or Form 1120-S for an LLC taxed as an S-corp, with the final return box checked; for a single-member LLC, Schedule C on the owner's 1040 for the year you close. If you had employees, also final Forms 941 and 940, with W-2s due to employees by the due date of the final 941.
Do I need to file Form 966?
Form 966 is filed by corporations, including an LLC that elected to be taxed as an S-corp or C-corp, within 30 days of adopting the decision to dissolve. A single-member LLC without that election, or an LLC taxed as a partnership, doesn't file it.
Can I dissolve an LLC that owes taxes?
The IRS won't close the business account until taxes are paid, and some states, such as Texas, require proof that state taxes are paid before dissolution. So we first file any missing returns and deal with the balance; IRS and state tax matters are a separate service.
Can you dissolve a non-resident's LLC?
Yes, we work online. For the final year, an LLC with a foreign owner files a pro forma 1120 with Form 5472, which also reports payments to the owner on liquidation. See LLC for non-residents.
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