Newbie With LLC
I have a new 8-plex and have formed a LLC. I believe it is taxed as a partnership(because 2 or more involved...Me and Wife..is this correct)...flows through...has anybody used Turbo tax to do there taxes for a LLC....if so...which version is best???? Or any suggestions would be helpful...Thanks....jmooch
Hello jmooch,
I believe you are correct, as an LLC's profits pass-through to its members and taxes are applied at the individual level. I don't have the ability to paste web addresses but you should check out the articles on William Bronchick's site legalwiz as they touch on the LLC tax issues. I haven't worked with turbotax at all so I'm of no help there.
On a side note, it's quite a coincidence that you also live in Glen Carbon! Do you do alot of investing in the Edwardsville and Glen Carbon areas? I am a beginner and would appreciate any advice you have on the area or general information. Drop me an email if you have any time!
Check with the TurboTax software developer. Call the customer service number and ask which version of their product completes the Form 1065 and the K-1s for your partnership.
When you get an answer, come back and post it to this thread.
Gee...thanks Dave T.....
....I did find out since my partner in the llc is my wife we can elect to file as a parntership or sole proprietor....I will try customer service, but I am sure there won't be too long of a wait on the 14TH!!!....have a great day..
Better check again. I don't think you can be a sole proprietor and still have a partner.
However, if you reside in a community property state, your state may allow you and your wife to treat your LLC as a single-member disregarded entity. You do not want to operate rental property as a sole proprietor (Schedule C and Schedule SE), when a disregarded entity (Schedule E) gives you a better tax treatement.
Consult a licensed tax professional to determine exactly how a partnership return (Form 1065 and Schedule K-1) flows through to your 1040.
I got the following from Bronchick's article....Are you saying that it is better to file as a partnership regardless even though my partner is my spouse....thanks for your thoughts...
TWO CHOICES FOR THE "FAMILY" LLC
An LLC formed between husband and wife has a choice for filing. Since a husband and wife business can normally report as a partnership or sole proprietor, they have the same choices with an LLC. Thus a husband and wife LLC can choose to file a 1065(partnership return) or simply report on Schedule ?C?.
To do form 1065 and k-1's you must use Turbo tax Business....not Home and Business....but Business. Then you also have to buy the product for your personal return....
Just in case you missed my point, reporting your rental income on Schedule C makes your income subject to Self-employment taxes.
Reporting the same rental income on Schedule E, eliminates self-employment taxes. Given a choice between filing as a sole proprietor and filing a partnership return, you want to choose the partnership.
Someone else will have to answer the question about a husband and wife team being treated as a sole proprietor (makes sense only if you file a joint return).