Question

LLC owner and head of household report

Forum|Forum|7 years ago
June 4, 2019
2 replies
0 views

In 2016 I opened an LLC (was planning to start a business, but I have not). I filed just as "head of household" and there was no option to add this or any expenses for the LLC. So basically I left that out. I wonder if this was correct? Not sure what to do in the new tax season (still have the LLC but not using it, my business idea is still a work in progress) and I have been working PT. Just want to make sure I file all correctly, at what point and how I manage having a company and my own taxes as a head of household?

TurboTax Deluxe Online

T

TaxGuyBill

Employee

If it is a Single Member LLC (that has not filed an election to be taxed as a corporation), you don't need to enter anything until the business is 'open' and 'ready for business'. Once the business is 'open', then you will enter the information (expenses before you open are usually "startup costs").

Critter

Employee

Depends on the type of LLC.
- Single member LLC. This type of entity is not recognized by the IRS as a separately taxable entity, and is therefore disregarded by the IRS. All income and expenses is reported on a SCH C as a part of the owner's personal tax return.
- Multi-member LLC. For this type of entity, if the number of owners is only two, and both owners are married to each other, and they will be filing a joint tax return, this is also considered as a disregarded entity. For this, all business income/expenses is split between the two owners and a separate SCH C for each of the owners is included with the jointly filed personal tax return.
- Multi-member LLC two or more owners NOT married to each other. This type of LLC has two or more owners that are NOT married to each other, or if married are NOT filing a joint tax return. The IRS considers this to be a partnership. For this type of LLC setup a completely separate partnership tax return is completed outside of and completely separate from the owners personal tax return. TO file a partnership return with TurboTax, you must use TurboTax Business, which is a completely separate program from Home and Business.