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How to File LLC Taxes

This is my clients 1st time filing her business taxes & I have not worked with her previously. I cannot tell how her LLC is structured & she doesn't remember. Should I file them as a business or with her personal taxes?

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Level 15

Once again, let's take one thing at a time: "I mean that she works. she has an employer that issued her a w-2. which probably is not important to the question I asked."

Okay, is this what you are stating: "She has a Real Job working for someone else, and the pastry operation is a side-gig she started doing."

See how perspective helps?

"but there is no employees of the LLC"

A single-member LLC that has no employees, not even this person, means it is Not acting as a corporation. Have you checked with the IRS, because they will have a record of the election? For instance, if you file using 1120 or 1120S, there should have been Payroll for her, and if there never was election to be treated as a Corporation, the IRS will kick it back as an error.

So far, you seem to have a Schedule C operation, but it's Your name, not ours, when you file this as the professional preparer. Have you done as much due diligence as possible, or not?

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"Level Up" is a gaming function, not a real life function.

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13 Replies 13
Level 15

You may like to refer to this: https://www.irs.gov/businesses/small-businesses-self-employed/limited-liability-company-llc

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Still an AllStar

Thank you, I have viewed the IRS page before. I was looking for some who does business taxes' experience with this, to give their view

 

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Level 15

"& she doesn't remember"

Get the Paperwork from her, from the Secretary of State, from whoever helped her "form" this entity and file the papers.

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"Level Up" is a gaming function, not a real life function.

I have the paperwork and I can't tell if it is a single member or corporation. I've also read the info on the IRS website.  So I am going with corporation and file the business taxes. but I wanted to see if I could get a little more insight.

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Level 15

"I have the paperwork and I can't tell if it is a single member or corporation."

But now you should be able to tell if there are other people involved, or not, in the LLC.

Now that you see it is Single Person, it's time to ask the IRS for a transcript or any info that helps you know if there was corporate treatment election.

"So I am going with corporation and file the business taxes. but I wanted to see if I could get a little more insight."

Whoa. This one is Easy to determine. Is she paid through Payroll? Is she using FEIN? That paperwork is available, too = applying for that FEIN. If there is FEIN, and if there is Corporation, there is payroll. That also means registered for FUTA and with your State. If none of that happened, you might be making a bad assumption for "corporation."

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"Level Up" is a gaming function, not a real life function.

She is a w-2 employee. but the LLC has no employees and she did not apply for an EIN. Its a pastry company. And when I look up on the state website, she is the only one listed and where it states  management structure: it says "All LLC member(s)"

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Level 15

Let's take this a bit at a time: "She is a w-2 employee."

Only a Corporation has employees.

"but the LLC has no employees"

That isn't true, because you told us she is paid through payroll. Or something is being done that is incorrect. Any LLC that has not elected to be treated as a Corporation, cannot have its "member/owner/shareholder" as a payroll-based employee. That means no W-2 processes.

So, you already have a conflict. Who put her on Payroll?

"and she did not apply for an EIN."

That can't be true, either. You cannot have Payroll without a FEIN. Unless they outsourced this to a PEO? That would be a third-party employer organization.

"Its a pastry company."

That has no bearing on any of this.

"And when I look up on the state website, she is the only one listed and where it states management structure: it says "All LLC member(s)" "

Again: who "helped" this person? She doesn't know, but someone did this work. Someone knows.

No one on the internet will know. I would have to do the same digging around and research. Call the State UI and ask them about this employer's registration for SUI. Talk to the Worker Comp people. Someone else will have come into contact with some useful info for you.

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"Level Up" is a gaming function, not a real life function.

I mean that she works. she has an employer that issued her a w-2. which probably is not important to the question I asked.

but there is no employees of the LLC

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Level 15

Once again, let's take one thing at a time: "I mean that she works. she has an employer that issued her a w-2. which probably is not important to the question I asked."

Okay, is this what you are stating: "She has a Real Job working for someone else, and the pastry operation is a side-gig she started doing."

See how perspective helps?

"but there is no employees of the LLC"

A single-member LLC that has no employees, not even this person, means it is Not acting as a corporation. Have you checked with the IRS, because they will have a record of the election? For instance, if you file using 1120 or 1120S, there should have been Payroll for her, and if there never was election to be treated as a Corporation, the IRS will kick it back as an error.

So far, you seem to have a Schedule C operation, but it's Your name, not ours, when you file this as the professional preparer. Have you done as much due diligence as possible, or not?

*******************************
"Level Up" is a gaming function, not a real life function.

View solution in original post

Level 15

Oh, as usual, forming an LLC for a side-gig baking, was not likely needed. People get all sorts of bad guidance, of course.

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"Level Up" is a gaming function, not a real life function.

Thank You. I have done more research and am glad that I did not stick with my original thinking.  She has a single member LLC, which was probably not needed for her side gig, as you stated. So, I am educating myself to give her better guidance than she has received, which is why I posed the question originally.

Thanks Again, your input was very helpful.

Level 15

YVW.

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"Level Up" is a gaming function, not a real life function.
Level 15

One word of advice ------------------ run!

This week's special - free roadrunner dinner with every return (legal disclaimer - you catch it and we'll cook it)
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