Question

Tax Year Prior to 2020: Single Member LLC Filing

Forum|Forum|6 years ago
June 7, 2019
3 replies
0 views

The past two years my CPA had filed my taxes using form 1065. I was informed by an IRS agent that since I am a single member LLC and my husband is not a part of the operation of my business or listed on my LLC documents we do not have file as a partnership. Although for 2013 and 2014 my business taxes was filed on form 1065, can I now just do 1040 along with my personal household taxes? or once you file as 1065 you can't change another tax year and file differently?

TurboTax Self Employed Online

S

SheriCD

Single member LLCs may include their business activity on Schedule C, which is included with your personal income tax return (Form 1040).

TurboTax Home and Business will help you. Indicate you have a business and we'll ask you if it's a single member LLC.

Make sure your state does not have a separate form that's filed separately from your personal state return. Some states have a different requirement than the federal return.

A

annievk-g

the above answer would seem to indicate that one would be walked through every aspect of accounting for a single member LLC by following the prompts/questions in the home/business package. this was not my experience. I cannot find anything that asks about LLC membership/status at all, and especially not single-member LLC status. Also, it does not seem to do anything with owner contributions or distributions, or ask any questions related to them. seems like a pretty big gap here. leaves me feeling very unsure about using this package.

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Jerseygirl1969

Since you mention distribution, sounds like you're an LLC filing as an S corp and need TurboTax Business. You'd need a separate filing for your personal income.

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MM991

I have a similar situation. The difficulty lies in answering what happened to the prior two-member LLC, which was treated as a partnership. There is a questionnaire to indicate what happened and the appropriate choice is not there. The fact is that the other partner retired. There was no taxable transaction. The taxpayer is continuing as a single-member LLC and reporting as a disregarded entity on schedule C. The problem is in when you indicated that it is the final year for the prior two-member LLC, there is no options available to indicate what really happened here. It is asking if you sold, gifted, etc. Has anyone run into that?

T

ThomasM125

Since you did not sell the partnership you don't need to report the disposition of it, assuming you don't have any carryover losses to account for. So, you can delete the K-1 entry that will get carried over from the previous year and then set up the sole-proprietorship as if it was a new business.

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G

gibsonaz1

Why isn't this a topic that is discussed every year? Home business zoning can be especially challenging. To know if one should try and form an LLC prior to and then going backwards is difficult when you think you have everything lined up. There needs to be pro bono consultative attorneys out there in every state that prepares these type of documents for you with the inside of them becoming your LLC attorney. I think that would work for all don't you?

ReneeM7122

Your CPA is correct, in general the IRS treats an LLC owned by a husband and wife in a non-community property state as a partnership. It can also be treated as a a qualified joint venture (QJV), but some rules apply. Here is a TurboTax article about QJV's. If one spouse does not participate in the business at all, then it can file as a "disregarded entity" separate from its owner, but again, some requirements must be met.

@gibsonaz1

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CGAZ

I have a single member LLC that received pass through K1 income form another LLC, do report the income by filing a return for my single member LLC or do I report this income on my personal taxes, I live in AZ BTW.