LLC income wrongly reported and deposited

---

@theunbelievable wrote:

The LLC is a partnership--myself and my husband. And yes, it is filed separately from our personal tax return. And there is no way that I can get the payers to report this income to the EIN instead of to my personal SSN. So I guess my question is, how do I report this income as coming in but going right back out to the LLC?

 

Thanks in advance for any help!

---

If you live in a community property state, your LLC will file as two separate Schedule C businesses, in the name of each spouse, each reporting half the income and half the expenses.  Just ignore the discrepancy and report your business income from your own accurate business records, regardless of what the 1099s say.

If you don't live in a community property state, the LLC will file a form 1065 partnership return.  (Note that partnership returns are due March 15, not April 15, and there is a substantial late fee unless you request an extension.  The extension request is separate from and in addition to any extension request you file for your personal return.  Hopefully you are asking about a 2023 transaction that will be reported next year instead of filing a late 2022 return.)

The LLC simply files a correct tax return using its own accurate business records, regardless of what the 1099s or bank account says, you don't do anything special.  If you get a 1099 in your personal SSN, that will need to be explained on your personal tax return.  You can enter the 1099 as income, then create an extra item of "other income" in a negative amount to offset the 1099, and use a reason like "LLC income already reported on form 1065".  If the IRS wants to see more details, they will send a letter.