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Kipmc7
Level 2

Can Turbo Tax prepare the K1 forms for my LLC? I am the manager. I have to prepare and send out the K1 forms.

There are over 20 members of the LLC. Each owns a different % of the business. Some own 8% some own 16% I own 24%.
1 Best answer

Accepted Solutions
Anonymous
Not applicable

Can Turbo Tax prepare the K1 forms for my LLC? I am the manager. I have to prepare and send out the K1 forms.

Domestic Partnerships (by default an LLC is a partnership if it has two or more members and does not elect to be taxed as a corporation)
Except as provided below, every domestic partnership must file Form 1065, unless it neither receives income nor incurs any expenditures treated as deductions or credits for federal income tax purposes.

 

deductions  = expenses.  if cash basis (item H1 on page 1 of 1065) and expenses were paid, a return was due.

  you say the LLC is insolvent. that may be good because the late filing penalty under IRC code sec 6698

(c)Assessment of penalty
The penalty imposed by subsection (a) shall be assessed against the partnership.

Not sure what will happen since you say its insolvent which means it can't pay.

why not dissolve the llc/partnership? 

 

if a return is required and not filed then the IRS could assert willful failure to file penalties under IRC code section 7203 - Willful failure to file return, supply information, or pay tax

 

Any person required under this title to pay any estimated tax or tax, or required by this title or by regulations made under authority thereof to make a return, keep any records, or supply any information, who willfully fails to pay such estimated tax or tax, make such return, keep such records, or supply such information, at the time or times required by law or regulations, shall, in addition to other penalties provided by law, be guilty of a misdemeanor and, upon conviction thereof, shall be fined not more than $25,000 ($100,000 in the case of a corporation), or imprisoned not more than 1 year, or both, together with the costs of prosecution. In the case of any person with respect to whom there is a failure to pay any estimated tax, this section shall not apply to such person with respect to such failure if there is no addition to tax under section 6654 or 6655 with respect to such failure. In the case of a willful violation of any provision of section 6050I, the first sentence of this section shall be applied by substituting “felony” for “misdemeanor” and “5 years” for “1 year”.

 

The term “person” as used in this chapter includes an officer or employee of a corporation, or a member or employee of a partnership, who as such officer, employee, or member is under a duty to perform the act in respect of which the violation occurs.

this means that if the IRS were to assert willful failure to file penalty, since you say you are the managing emeber it's your responsibility to file a return if one is due, the penalties would be asserted against you. 

Kind of doubt the IRS would assert this penalty but my doubt doesn't assure this.

 

 

 

 

 

 

 

 

 

View solution in original post

18 Replies
rjs
Level 15
Level 15

Can Turbo Tax prepare the K1 forms for my LLC? I am the manager. I have to prepare and send out the K1 forms.

An LLC with multiple members is treated as a partnership for tax purposes (unless the LLC has filed an election with the IRS to be treated as a corporation). The LLC has to file its own partnership tax return, Form 1065, separate from your personal Form 1040 tax return. Part of the partnership tax return is a Schedule K-1 for each partner. Each partner gets a copy of his or her Schedule K-1.


To prepare the Form 1065 partnership return for the LLC you have to use TurboTax Business (which is not the same as TurboTax Home & Business). TurboTax Business is available only as CD or download software, and only for Windows. Go to the following link for more information about TurboTax Business, and to purchase it.


TurboTax Business


TurboTax Business cannot prepare your personal Form 1040 tax return, and none of the personal editions of TurboTax can prepare a Form 1065 partnership return, so you need two separate TurboTax products for your situation.


The tag below your question indicates that you are using TurboTax Online. If that is correct, you need Premier or higher to be able to enter the Schedule K-1 in your personal Form 1040 tax return.


Since this is apparently the first time that you are filing a tax return for the LLC, you might benefit from consulting a local tax professional to make sure that you get all the details right.

 

Anonymous
Not applicable

Can Turbo Tax prepare the K1 forms for my LLC? I am the manager. I have to prepare and send out the K1 forms.

a 2019 calendar year 1065 or even an S-Corp return was due 9/15/2020. it is now late. there is about a $200/per member/per month penalty for filing late.   as of now, that would be about $4,000, get pro help becuase tkey can write a letter to go with the return to request abatement of those penalties. 

Kipmc7
Level 2

Can Turbo Tax prepare the K1 forms for my LLC? I am the manager. I have to prepare and send out the K1 forms.

Is there someone at the IRS who could check if I am delinquent on the taxes for the LLC? Is there a number I can call?

VolvoGirl
Level 15

Can Turbo Tax prepare the K1 forms for my LLC? I am the manager. I have to prepare and send out the K1 forms.

You are the manager?  Do you have a bookkeeper or accountant?  You need to go to a CPA asap.

rjs
Level 15
Level 15

Can Turbo Tax prepare the K1 forms for my LLC? I am the manager. I have to prepare and send out the K1 forms.


@Kipmc7 wrote:

Is there someone at the IRS who could check if I am delinquent on the taxes for the LLC? Is there a number I can call?


The IRS could only tell you that the LLC has not filed a tax return yet, but you already know that.

 

You need professional help.

 

Tax professional are going to get very busy as October 15 approaches. Call someone as soon as you can.

 

Kipmc7
Level 2

Can Turbo Tax prepare the K1 forms for my LLC? I am the manager. I have to prepare and send out the K1 forms.

Yes I am now the Managing Member. The prior MM resigned in 2015 but there was no activity. The LLC is insolvent. The only asset is a judgment. I had no funds pay for accountants for the last 5 years.

Kipmc7
Level 2

Can Turbo Tax prepare the K1 forms for my LLC? I am the manager. I have to prepare and send out the K1 forms.

Could / would the IRS confirm if a filing was actually due? There was no income.

rjs
Level 15
Level 15

Can Turbo Tax prepare the K1 forms for my LLC? I am the manager. I have to prepare and send out the K1 forms.


@Kipmc7 wrote:

Could / would the IRS confirm if a filing was actually due? There was no income.


I don't think they can tell you that, but call them and ask. 800-829-1040.


Remember that when you call the IRS you are not getting an official IRS response. You are just talking to a call center employee. The IRS's latest figure for the accuracy of their telephone service is 91.6%. That means that 1 out of every 12 answers that they give is wrong. If you happen to be the one out of 12 that gets a wrong answer, it's your responsibility to know that it's wrong, and to fulfill your tax obligations correctly. Relying on what an IRS telephone rep said is not an excuse for failing to meet your obligations.

 

Critter-3
Level 15

Can Turbo Tax prepare the K1 forms for my LLC? I am the manager. I have to prepare and send out the K1 forms.

Kipmc7
Level 2

Can Turbo Tax prepare the K1 forms for my LLC? I am the manager. I have to prepare and send out the K1 forms.

Thank you.

 

The page says:" 

  • A domestic partnership must file an information return, unless it neither receives gross income nor pays or incurs any amount treated as a deduction or credit for federal tax purposes.

This is an Arizona LLC. Is that a partnership?

 

We had no income in 2019 (or for years before that) . We had expenses but how do I know if the were treated as a deduction?  Deduction against what ?  The LLC did not file taxes in 2019. Please explain.

Anonymous
Not applicable

Can Turbo Tax prepare the K1 forms for my LLC? I am the manager. I have to prepare and send out the K1 forms.

Domestic Partnerships (by default an LLC is a partnership if it has two or more members and does not elect to be taxed as a corporation)
Except as provided below, every domestic partnership must file Form 1065, unless it neither receives income nor incurs any expenditures treated as deductions or credits for federal income tax purposes.

 

deductions  = expenses.  if cash basis (item H1 on page 1 of 1065) and expenses were paid, a return was due.

  you say the LLC is insolvent. that may be good because the late filing penalty under IRC code sec 6698

(c)Assessment of penalty
The penalty imposed by subsection (a) shall be assessed against the partnership.

Not sure what will happen since you say its insolvent which means it can't pay.

why not dissolve the llc/partnership? 

 

if a return is required and not filed then the IRS could assert willful failure to file penalties under IRC code section 7203 - Willful failure to file return, supply information, or pay tax

 

Any person required under this title to pay any estimated tax or tax, or required by this title or by regulations made under authority thereof to make a return, keep any records, or supply any information, who willfully fails to pay such estimated tax or tax, make such return, keep such records, or supply such information, at the time or times required by law or regulations, shall, in addition to other penalties provided by law, be guilty of a misdemeanor and, upon conviction thereof, shall be fined not more than $25,000 ($100,000 in the case of a corporation), or imprisoned not more than 1 year, or both, together with the costs of prosecution. In the case of any person with respect to whom there is a failure to pay any estimated tax, this section shall not apply to such person with respect to such failure if there is no addition to tax under section 6654 or 6655 with respect to such failure. In the case of a willful violation of any provision of section 6050I, the first sentence of this section shall be applied by substituting “felony” for “misdemeanor” and “5 years” for “1 year”.

 

The term “person” as used in this chapter includes an officer or employee of a corporation, or a member or employee of a partnership, who as such officer, employee, or member is under a duty to perform the act in respect of which the violation occurs.

this means that if the IRS were to assert willful failure to file penalty, since you say you are the managing emeber it's your responsibility to file a return if one is due, the penalties would be asserted against you. 

Kind of doubt the IRS would assert this penalty but my doubt doesn't assure this.

 

 

 

 

 

 

 

 

 

View solution in original post

Kipmc7
Level 2

Can Turbo Tax prepare the K1 forms for my LLC? I am the manager. I have to prepare and send out the K1 forms.

You asked why we don't dissolve the LLC since we are insolvent. That is because we do have a judgment in our favor that is more that $1M. We have not been able to collect but we may in the future.

 

 

Kipmc7
Level 2

Can Turbo Tax prepare the K1 forms for my LLC? I am the manager. I have to prepare and send out the K1 forms.

Thank you I plan on getting Turbo  Tax Business 2019. Can you recommend a simple accounting software that interfaces well with TT Business? 

tagteam
Level 15

Can Turbo Tax prepare the K1 forms for my LLC? I am the manager. I have to prepare and send out the K1 forms.


@Kipmc7 wrote:

Thank you I plan on getting Turbo  Tax Business 2019. Can you recommend a simple accounting software that interfaces well with TT Business? 


The only accounting software that "interfaces" with TurboTax Business would be QuickBooks desktop (not online).

 

See https://ttlc.intuit.com/community/entering-importing/help/how-do-i-import-quickbooks-data-into-turbo...

 

See also https://quickbooks.intuit.com/desktop/

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