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Old 03-05-2014, 12:03 AM
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Schedule C ok for filing LLC--Wife and I are the members

My wife and I have an LLC registered in Oregon. This will be our first year filing taxes for it.

I have called the IRS repeatedly and their service is really lame. Due to funding cuts, there are very few questions they have staff to answer anymore. So, they can't answer my question.

My wife and I are the only members listed on the LLC. We both have W-2 income here in California. We want to file jointly. Can we file the LLC on Schedule C and our W-2 income on the 1040? If not, what form/schedule do we need to file? Any pointers would truly be appreciated. Thanks everyone for reading.



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Old 03-05-2014, 08:17 PM
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Originally Posted by treefrog View Post
My wife and I have an LLC registered in Oregon. This will be our first year filing taxes for it.

# I have called the IRS repeatedly and their service is really lame. Due to funding cuts, there are very few questions they have staff to answer anymore. So, they can't answer my question.

#2; My wife and I are the only members listed on the LLC. We both have W-2 income here in California. We want to file jointly. Can we file the LLC on Schedule C and our W-2 income on the 1040?


#3;If not, what form/schedule do we need to file? Any pointers would truly be appreciated. Thanks everyone for reading.
#1;unfortunately I guess so

#2;you registered yur LLC in Oregon, NOT in CA, then your LLC in Oregon is treated as PS; then, You will file the LLC's complicated federal income tax return using IRS Form 1065. Then you need to pay SECA tax and do not need to file Sch C of 1040.You and your spouse must each report your individual shares of the income generated by the partnership income. You will need to include a Sch K-1 for yourself, your spouse and report them on your 1040;. You can usually only file your federal income tax return for your LLC as a sole proprietorship if the entire LLC is owned by one spouse. The other spouse may work as an employee, but may not be an owner.then you need to issue an W2 to upor spouse and you ned to file Sch C of 1040 and both of you report the income on your 1040. You and your spouse may be able to both file as sole proprietors of the LLC if you meet the requirements of a qualified joint venture in CA; aslongas the LLC is in CA. You and your spouse must file a joint return. You and your spouse must be the only members of the joint venture. You and your spouse must both materially participate in the operation of the LLC and you must divide the income and expenses of the LLC based on each spouse's interest in the LLC. You and your spouse must file separate Schedule C's with your joint tax return.As your LLC isin Oregon , NOT in CA, you can’t treat it as qualified joint venture but you can treat it as PS or Sole propriorship.

#3;as mentioned above. UNLESS your LLC is treated as S- or C c-corp, it is usually treated as PS. Pleasd read the post above thoroughly.



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Old 03-29-2014, 08:50 PM
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HI Wnhough. I'm so grateful you replied, you definitely went above and beyond what I was expecting to get online, so thanks a bundle for that. I've been sitting on the advice you gave me, digesting it. It's really hard to find help for the specific case that I'm in. From what I read so far, this is above and beyond what I'd be able to do on my own. What is a PS? A proprietorship? Filing the 1040 jointly, will my wife and I both have separate K-1s? From what I imagine with filing jointly, we wouldn't... If we claim that the LLC is completely operating in OR and not CA, does that simplify the process dramatically? If so, what would that entail? Thank you again.



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Old 03-29-2014, 09:53 PM
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Originally Posted by treefrog View Post

#1; What is a PS? A proprietorship?


#2; Filing the 1040 jointly, will my wife and I both have separate K-1s?


#3; From what I imagine with filing jointly, we wouldn't... If we claim that the LLC is completely operating in OR and not CA, does that simplify the process dramatically? If so, what would that entail? Thank you again.
#1;partnership


#2;yes; as you are in a separate property state,Oregon, you are considered to own interests separately, i.e. now you have 2 members of the LLC.
aslongas both of youoperate the LLC jointly, both should be listed in the articles of organization as a member. Each LLC member is legally responsible for filing business profits and losses on his or her tax return as an LLC is a tax reporting and not a tax paying entity. If a husband and wife file jointly, this can make filing taxes more convenient. So you are considered "partners" in business and a partnership tax return, 1065, is required unless you elect to be a C or S.



#3;I guess it depends on the state you are in and what kind of business the LLC is.however, as the llc is in Oregon it is a ps. If the LLC is a rental, you can elect to treat it as a smllc; when a husband and wife own a business together, it is considered a partnership under tax law, unless another type of entity is elected, such as C or S Corp. However, the IRS has recently ruled that if you are in a community property state, not Oregon I guess; but in community state, i.e., ca state, you can treat the husband and wife as one taxpayer for purposes of the smLLC rules. It is/can qualify a qualified joint venture ,a special tax situation in which a husband and wife jointly running a business that is not a corporation may qualify to file as a sole proprietorship rather than a partnership. in this case of spouses owning a partnership, ypu do not need to file as a partnership on Form 1065, with individual K-1 forms. The IRS specifically excludes spouses in a state law entity including a llc or llp. So if you have an LLC, you cannot use the qualified joint venture election with the exception that an LLC in a community property state may be allowed to be a QJV

Therefore, if you are in a separate property state, the husband and wife are considered to own interests separately, i.e. now you have 2 members of the LLC.



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Old 04-20-2014, 07:09 PM
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Good afternoon. I think we got it. We sent in returns for 2012 and 2013. We registered the OR LLC 10/2012. I guess we were legally required to file for 2012? We didn't operate at all in 2012, only registered. That doesn't exclude us from having to file for 2012? I don't think so, so anyway, I already sent in the return for that year too. Will I be penalized? A colleague mentioned that my wife and I might be penalized nearly $200/month, each of us, for each month late? I read online about this last night, and this doesn't really seem true, if you didn't owe tax for that year... I'm not sure, but I can't imagine a $6,000 fine ($3,000 for myself, and 3k for wife). Are you familiar with penalties for this reason? Thanks a bunch; you're a big help to many folks here.



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Old 04-20-2014, 07:50 PM
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Originally Posted by treefrog View Post
Good afternoon. I think we got it. We sent in returns for 2012 and 2013. We registered the OR LLC 10/2012. I guess we were legally required to file for 2012? We didn't operate at all in 2012, only registered. That doesn't exclude us from having to file for 2012? I don't think so, so anyway, I already sent in the return for that year too. Will I be penalized? A colleague mentioned that my wife and I might be penalized nearly $200/month, each of us, for each month late? I read online about this last night, and this doesn't really seem true, if you didn't owe tax for that year... I'm not sure, but I can't imagine a $6,000 fine ($3,000 for myself, and 3k for wife). Are you familiar with penalties for this reason? Thanks a bunch; you're a big help to many folks here.
Good afternoon. I think we got it. We sent in returns for 2012 and 2013. We registered the OR LLC 10/2012. I guess we were legally required to file for 2012?==========>>>>>>>>>>>LLCs file business tax returns annuallyAll LLCs in OR state to do business in the state must file an Annual Report with the Oregon Secretary of State. LLC annual reports are due for the year in which they are filed. The annual report must be received by the Office of the Secretary of State prior to the anniversary date to avoid late filing penalties. The fee for filing the annual report is $100 for LLCs. Every Oregon LLC must have an agent for service of process in the state. This is an individual or business entity that agrees to accept legal papers on the LLC’s behalf if it is sued. The registered agent may be an Oregon resident or a business entity authorized to do business in Oregon. The registered agent must have a physical street address in Oregon.
note; LLCs that you designate as a partnership for tax purposes must provide the IRS with an informational tax return on Form 1065 and a Sch K-1 attachment for each LLC member, you and your spouse. This filing requirement remains effective for any tax year the LLC has no business activity or income. When you prepare the return, you can simply enter zeroes for revenue and expenses UNLESS you have taxable income to be reported on 1065. Unless you file Form 7004 for an automatic six-month extension of time to file, the IRS will impose an $89 , current as of November 2010 , per-partner penalty for each month you file the return after its due date. Sch K-1 reports each member’s share of partnership profits and losses. The IRS will impose an additional penalty of $50 per month for each K-1 you fail to attach to the return by the due date.

We didn't operate at all in 2012, only registered. That doesn't exclude us from having to file for 2012?========>>No; filing requirement remains effective for any tax year the LLC has no business activity or income.



I don't think so, so anyway, I already sent in the return for that year too. Will I be penalized?======>>>>>>>>>I guess it depends;


A colleague mentioned that my wife and I might be penalized nearly $200/month, each of us, for each month late? I read online about this last night, and this doesn't really seem true, if you didn't owe tax for that year... I'm not sure, but I can't imagine a $6,000 fine ($3,000 for myself, and 3k for wife). Are you familiar with penalties for this reason? Thanks a bunch; you're a big help to many folks here==============>>>>>>>>>>if LLCs files their taxes late, they will be responsible for paying a late filing penalty; The penalties for filing a lateLLC Tax Return are $50 per partner multiplied by the number of months that the partnership has been delinquent in its filing of its LLC tax return.

Therefore, for a 3-member partnership return that has been 4 months late in its filing of its Partnership Tax return, the penalties would be $50 x 3 x 4 = $600.

However. the following partnerships will qualify, for an automatic waiver of the Sec. 6698 (A) (1) late-filing penalty for a partnership return” provided that the following 3 situation's apply as follows;

1.The partnership has 10 or fewer partners, all of who are natural persons, that means Trusts and Estates are excluded.

2. Each partner's share of each partnership item is the same as such partner's share of every other item;

3. The partnership can establish, if requested by the IRS, that all partners have fully reported their shares of income, deductions and credits on their timely filed returns.

Under the above situation, the IRS would generally allow the abatement of late filing penalties



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