A single member LLC is considered a disregarded entity by the IRS, therefore a separate return for the business is not required. The business information for the LLC should be included on your personal income tax return on Schedule C, E, or F. You can enter payments to your contractor as a business expense. To record business expenses, you will to use either TurboTax Self Employed (Online) or TurboTax Home & Business (CD/Download version)
If you need to create a 1099 MISC form for a contractor, see the information below:
https://ttlc.intuit.com/replies/3301452
Thank you so much. I am actually using TurboTax Self-Employed and TurboTax Quick Employer Forms. The options for "Business Entity Type" are:
- Sole Propietorship (Schedule C/E/F Form 4835
- Household Employer Only (Schedule H)
- Partnership/LLC (Form 1065)
- Corporation (Form 1120/1120 S)
- Fiduciary/Trust (Form 1041)
- Other.
Just making sure, the correct option I have to select is the first one, right? Sole Propietorship (Schedule C/E/F Form 4835).
A single member LLC is, by default, treated as a "disregarded entity". This means you file the LLC on a schedule C as part of your personal tax return as if it was an unincorporated sole proprietorship. Your schedule C business can pay a subcontractor, there's no problem doing that. You would need to issue a 1099-MISC if the amount is over $600, and the deadline to issue that form was January 31. I don't know what the late fees are.
You can file a form 8832 to be taxed as a partnership (form 1065) or an S-corp (form 1120), but that election can't be made retroactive more than 75 days. If you wanted to make that election, it would take effect as of some time in February 2019. There are also legal and tax consequences to filing as a partnership or S-corp that you would want to review with an accountant or attorney before making the election.