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Old 12-21-2013, 04:43 PM
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General Guidance on Married LLC Situation

Hi all,

My wife and I started two completely unrelated LLC's in Maryland, where we live, in 2013. This will be the first year we handle taxes for our situation.

One LLC is Single-Member (myself only) for something I am only involved in. The second LLC we are both partners of (two members total), although she primarily runs day-to-day operations and I work about 15% of the time.

My question is: how, generally, are we required to file. I though I read somewhere that because we have separate LLCs, we had to file separately, but now I cannot find any supporting documentation for that.

My understanding now is: 1) I will fill out a Schedule C for my LLC since it is Single-Member and a partnership return is not required. 2) We will fill out a 1065 for the joint LLC (Maryland is not a community state) and each receive our own Schedule C from the K-1.

Can we flow all of these different Schedule C's into a joint 1040 return or do we have to file separately? Did I get any of that wrong? I also gave the companies that provide the revenue for my Single Member LLC the LLC name and LLC Federal EIN, but I believe now that I should have submitted my personal tax id (SS #) since as a Single Member LLC, I should not file a partnership return. Do I have to back-track and contact them to change it or am I OK to just claim any income from them on my personal Schedule C?

Thanks so much!
-Greg



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Old 12-21-2013, 07:05 PM
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Quote:
Originally Posted by gdubb85 View Post
Hi all,

#1;My wife and I started two completely unrelated LLC's in Maryland, where we live, in 2013. This will be the first year we handle taxes for our situation.One LLC is Single-Member (myself only) for something I am only involved in. The second LLC we are both partners of (two members total), although she primarily runs day-to-day operations and I work about 15% of the time.My question is: how, generally, are we required to file. I though I read somewhere that because we have separate LLCs, we had to file separately, but now I cannot find any supporting documentation for that.



#2;My understanding now is: 1) I will fill out a Schedule C for my LLC since it is Single-Member and a partnership return is not required. 2) We will fill out a 1065 for the joint LLC (Maryland is not a community state) and each receive our own Schedule C from the K-1.



#3;Can we flow all of these different Schedule C's into a joint 1040 return or do we have to file separately?


#4;Did I get any of that wrong? I also gave the companies that provide the revenue for my Single Member LLC the LLC name and LLC Federal EIN, but I believe now that I should have submitted my personal tax id (SS #) since as a Single Member LLC, I should not file a partnership return. Do I have to back-track and contact them to change it or am I OK to just claim any income from them on my personal Schedule C?

Thanks so much!
-Greg
#1;For the SMLLC, you ned to file your Sch C/Sch SE and report income/loss on 1040 line 12; for MMLLC, you UNLESS yu are qualified joint venture entity, need to file form 1065.Your MMLLC is a hybrid between a corporation, and a partnership or sole-proprietorship, and if you're filing the taxes on behalf of your LLC, you may find it daunting to look at a Form 1065 for the first time. As the LLC is a partnership, normal partnership tax rules will apply to the LLC and it should file a Form 1065. Each owner should show their pro-rata share of partnership income, credits and deductions on Schedule K-1 (1065). Generally, members of LLCs filing Partnership Returns pay self-employment tax on their share of partnership earnings on Sch SE; so, as part of the Partnership return you generate Schs K-1 yourself, one for each partner,your spouse, and give it to the her. You use these to prepare your individual Form 1040 tax returns, though you do not attach copies to your returns


#2;Correct as mentioned above. As long as you file From 1065, each of doesn’t receive Sch C but receives a Sch K1

#3;As said, as long as your LLC is a form of qualified joint venture entity, then yes; each of you must file Sch C/ Sch SE, NOT Form 1065.If not, no. You must absolutely file Form 1065, NOT Sch C/Sch SE.

#4;Correct. As LLC has more than one owner or “member” it must apply for an EIN. Additionally, if the SMLLC has any employees other than the single owner, it must apply for an EIN. If, however, your SMLLC has no employees, you may be able to use your personal SSN as your SMLLC’s unique identification number for the purpose of filing taxes, applying for bank loans, or conducting business with other companies. The IRS has no special tax classification for LLCs; rather, an LLC is viewed as either a corporation, partnership, or disregarded entity. Unless you intentionally elect to be taxed as another type of entity, the IRS will treat your SMLLC as a disregarded entity. Disregarded entities do not need an EIN and are taxed the same way as sole-proprietorships; that is, the LLC’s income passes through to the single member’s personal income tax return.

Do I have to back-track and contact them to change it or am I OK to just claim any income from them on my personal Schedule C?”==>As mentioned above, as long as you file your return for your SMLLC, you MUST file Sch C/Sch SE, NOT form 1065; also unless your MMLLC is qualified joint venture entity, you must file Form 1065 /Sch SE for your MMLLC.



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Old 12-21-2013, 07:48 PM
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thanks so much on all those answers- one item that is not clear though, can we each (as a married couple) file the 1040 jointly? we got married in 2013, so that is a new change for us as well



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Old 12-21-2013, 08:06 PM
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“one item that is not clear though, can we each (as a married couple) file the 1040 jointly? “=>> What do you mean by can we each filing 1040 jointly????? You mean filing your return as MFS???You can file your return as MFJ or MFS. Married taxpayers can choose between filing a joint tax return or a separate tax return. The MFS filing status provides fewer tax benefits than filing joint returns, but you will need to weigh the pros and cons and decide for yourselves which is the best filing status.



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Old 12-22-2013, 01:40 PM
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Yes I meant MFS vs. MFJ. As I mentioned in my first post, I thought in the past I had read the married couples that may independently be involved in multiple LLCs HAD to do their taxes separately and file two 1040's (MFS), but now that I have started researching again I could not find anything that suggested that. And you have confirmed the MFS vs. MFJ is a separate decision and we can choose whatever we think is the best, so thank you!



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