Filing a Final Business Tax Return When Closing an LLC
A messy business closure creates tax notices for years. Here's the sequence to file a final return and formally wind down a Montana LLC or corporation.
Federal — mark the return 'Final'
On Form 1120-S, 1065, or 1120, check the 'Final return' box in the header.
On K-1s (S-corp or partnership), check the 'Final K-1' box for each owner.
The final return covers the short year from January 1 through the date of dissolution.
Due date: 15th day of the third month after the month of dissolution (partnerships and S-corps).
Payroll and 1099 wind-down
File final 941 (or 944) for federal payroll taxes and check the 'final return' box.
File final W-2s and W-3 for the year of closure.
File final Montana withholding return (MW-3) and final UI report.
File final 1099s for any contractors paid.
Sales tax and other state accounts
Montana has no general sales tax, so no filing needed.
Cancel Montana withholding, UI, and workers' comp accounts with a formal notice of closure.
Distribute assets and settle liabilities
Pay all creditors before distributing remaining assets to owners.
Final distributions may trigger gain to owners if distributions exceed basis (S-corps and partnerships).
Non-cash asset distributions from S-corps trigger gain recognition at the entity level as if sold at FMV — a common surprise.
File Articles of Dissolution with the Montana Secretary of State
File Articles of Dissolution with the Montana SOS (about $15 fee, filed online at biz.sosmt.gov).
This formally ends the entity's legal existence and stops annual report obligations.
Do this AFTER the final tax return is filed — the SOS filing signals the closure date.
Cancel EIN
The IRS doesn't cancel EINs, but you can close the business account by mailing a letter to the IRS with the entity name, EIN, address, and reason for closing.
A quick disclaimer
This article is general information for Montana small business owners, not tax, legal, or accounting advice for your specific situation. Rules change, and how they apply depends on facts we don't know about you. Before acting on anything you read here, talk to a qualified professional. If you're a Montana business owner and want a real conversation about your books, payroll, or tax, that's what Marlow Accounting is here for — call 406-290-1214 or schedule a discovery call.