Added a new Member to my Single Member LLC

[spaziano]

I'm using  turbotax Home & Business.

In 2020 my business was as single member LLC.  So I simply filed a schedule C.
But in 2021, we added a second member.  Now it is a two member LLC.  I want to file a form 1065 and issue K-1 to each member.

How is this done in the TurboTax software?

[GeorgeDenseff]

You will need TurboTax Business edition.  It is only available for Windows.  There is no MAC version.  Since this is your first year, you might want to use a local tax preparer instead so you can learn what is needed for a multiple member LLC.  Then go to TT Business next year.  

[VolvoGirl]

Turbo Tax Business is a separate program from Home & Business.  It is not available to do online or on a Mac.

You can buy the Window's version here…..

https://turbotax.intuit.com/small-business-taxes

You will have to start the 1065 fresh.  You can't import, transfer your Schedule C or upgrade Home & Business to Business.

[Carl]

In 2020 my business was as single member LLC. So I simply filed a schedule C.
But in 2021, we added a second member.

Basically, you have to close the single member LLC and open a new multi-member LLC. So you'll be filing a final SCH C on the 2021 taxes for the single member LLC. All inventory and assets (if any) in the single member LLC will need to be removed for personal use. Then when you start the first 1065-Partnership/Multi-member LLC tax return, those assets will be your initial contribution to the partnership/multi-member LLC.

I would highly suggest you seek professional help for your 2021 taxes for both your personal taxes with the final SCH C and what will be your first 1065 return. This is particularly important if your state also taxes personal income, as you're dealing with a change in the type of business entity you have. The tiniest mistake can be costly when such mistake is realized later down the road.  Professional help for at least the 2021 taxes will significantly reduce the likelihood of such mistakes occurring.

[spaziano]

Thank you for your insight.  This is complicated and I appreciate your advice.

[spaziano]

This is complicated and I appreciate your advice.

[tagteam]

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@spaziano wrote:

This is complicated and I appreciate your advice.

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You should absolutely seek guidance from local legal counsel and a tax professional for this matter.

[Opus 17]

@spaziano 

Something else I did not see mentioned yet, your LLC needs a new EIN because you changed the ownership of the business.