941 form

[Samantha123]

Husband owns a LLC. No employees and has not paid him self out of the business account (fairly new business) do i need to file a 941 form? workers comp is doing an audit for some reason and requesting this form. but we have no employees. 

[AmeliesUncle]

Has the LLC made an election to be taxed as a corporation?

If not, your husband is self-employed (files his business on Schedule C of your tax return).  

Does the Worker's Compensation company know that your husband is self-employed?  If so, they should be asking for a copy of your Schedule C.

I think Worker's Compensation does an 'audit' every year because the cost of the insurance is based on the pay of the workers, so they need to check what the pay of the workers is every year.

[tagteam]

I agree with @AmeliesUncle and, further, this may be a random audit of LLCs by the state.

You might be able to dispose of the matter with a letter of explanation or even a phone call.

[Samantha123]

yes so we went off his personal return and did the schedule C form. 

- if he submits the C form will that effect the workers comp? because for most of his contractors he has to have that coverage. 

[tagteam]

Contractors? In which state is the business located?

Workers compensation insurance is generally for employees (and paid by employers), not for independent contractors.

[Samantha123]

hes a subcontractor. He is the owner and employee in a sense. But the Contractors he does work for require workers comp or they will not sub contract out to him. and Lousiana 

[Mike9241]

form 941 and wc insurance is for employees. independent contractors, if used, are not employees. neither is he if his business is not incorporated.  If he used ICs, the WC audit may be a check by the state to see that they were properly classified as ICs. Some business improperly classify employees as ICs to avoid the complications of payroll taxes.  and the cost of WC insurance. They face big problems if caught because the state will also notify the IRS. 

[tagteam]

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@Samantha123 wrote:

He is the owner and employee in a sense.

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He is a sole proprietor in that case, not an employee in any sense (filing a Schedule C).

The contractors most likely want him to carry general liability insurance so if he gets injured or causes property damage, etc., his policy will provide coverage.

Regardless, it's not workers comp insurance since he's not an employee of the contractors for whom he provides his services.

[AmeliesUncle]

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@Samantha123 wrote:

yes so we went off his personal return and did the schedule C form. 

- if he submits the C form will that effect the workers comp? 

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If the Worker's Compensation covers himself, yes.  

If the Worker's Compensation ONLY covers himself (not anybody that he hires to work for him), Schedule C should be the only thing that they need for the audit.