Single Member LLC to Multimember LLC

Forum|Forum|3 years ago
February 15, 2023
3 replies
0 views

My wife operated her business as a single member llc. In June 2022, she added me as a member of the llc and converted it to multimember llc. We changed the status at the NJ state level and also filed form 8832. We got confirmation from state as well as IRS confirming the change. I know that we will have to file Schedule C for the period Jan. 2022 to May 2022 and Form 1065 from May 2022 to Dec. 2022. Below is the question I have:

1) When preparing the Schedule C form in Turbotax Home and Business, there is no option to choose the end date of single member llc i.e. May 31st 2022. How do make sure that operating date for the single member LLC is correctly reported. I am worried that my individual return may get rejected because of 2 two different filings (Schedule C and 1065) of the same LLC

TurboTax Home & Biz Windows

Best answer by AliciaP1

Yes, you can edit your business info in TurboTax Home & Business as well. I'm not sure what Form you mean to attach to your Schedule C - there is no federal Form 8564.

To edit your business info in TurboTax Home & Business you can follow these steps:

Within your tax return under the Business tab click Continue and I'll choose what I work on
Click Update for Business Income and Expenses
Click Edit for the business you need to update
Click Update for the Business Profile
Click Edit for the Disposed of Business in Current Year
Mark the box for I sold (or disposed) of my business in 2022
Mark No for Did you dispose of the business in either of the following ways?

@vshah20

Anonymous_

Employee

@vshah20 wrote:
I am worried that my individual return may get rejected because of 2 two different filings (Schedule C and 1065) of the same LLC

Did your wife have an EIN for her LLC? If so, did you get a new EIN?

See https://www.irs.gov/businesses/small-businesses-self-employed/do-you-need-a-new-ein

If your wife never got an EIN for her LLC, you will need one for your multi-member LLC.

vshah20Author

The single member LLC had and EIN. We are using the same EIN for them multi-member LLC as well

ThomasM125

I'm not sure if using the same EIN number in two places on your tax return will present a problem. However, if you didn't receive any 1099 forms reporting income using the EIN number, you could leave it off the schedule C. Many sole proprietors don't have an EIN, so it is common practice not to have one listed on the schedule C. If you have income reported on a Form 1099-NEC then you might need to enter the EIN on the Schedule C as the IRS will want to match the income to the tax return.

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"

AliciaP1

You can mark the Schedule C as ended in 2022 within the business General Information section. The end date is not necessary for the single-member LLC, just ensure the start date of the partnership is accurately reported on the Form 1065 and in future ones. Also, be sure you complete the Form 1065 before you do your personal return, as you will need the Schedule K-1 forms from the partnership in order to complete your personal return.

To mark the single-member LLC as ended in TurboTax Online you can follow these steps:

Using the magnifying glass near the top right of the page search for Schedule C
Use the Jump to link that shows in the results
Click Edit for your line of work you need to mark ended
Click Edit for the General Info line
You can see Stopped work in 2022 near the middle of the screen, click Edit below
Mark the box for I stopped XXX in 2022 and Continue
On the Tell us if any of these situations apply screen, mark the box None of these apply

@vshah20

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"

vshah20Author

Hi @AliciaP1

Thank you so much for the feedback. It was great relief to get that solution.

Will the feature to edit be available on the desktop Turbotax version as well? I am using the Desktop Home/Business Edition and not the online version.

Would I need to file any other forms like Form 8564 along with the Schedule C?

AliciaP1Answer

Yes, you can edit your business info in TurboTax Home & Business as well. I'm not sure what Form you mean to attach to your Schedule C - there is no federal Form 8564.

To edit your business info in TurboTax Home & Business you can follow these steps:

Within your tax return under the Business tab click Continue and I'll choose what I work on
Click Update for Business Income and Expenses
Click Edit for the business you need to update
Click Update for the Business Profile
Click Edit for the Disposed of Business in Current Year
Mark the box for I sold (or disposed) of my business in 2022
Mark No for Did you dispose of the business in either of the following ways?

@vshah20

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"

kalilahi

@vshah20 When you filed the 8832 to change the classification with the IRS, did you need to file any additional papers with it (for example, a copy of the articles of organization or similar) so the IRS knows you made the change in ownership? I am in the same boat (changing a single member LLC to multimember LLC) and the IRS rejected the 8832 b/c the EIN is associated with the single member. Wondering if there is something in particular that I should have filed with the 8832. Thanks!