My husband opened a LLC with the state of Florida. His EIN is for a sole member. When I did our taxes I purchased Turbo Tax Business. I filed our taxes as a 50/50 partnership. I only submitted the business taxes to the IRS. I thought I had to file this way because we are married. I am filing a prior year late and procrastinated on submitting them because the business took a 14,000 loss. Even though we’re at a loss for the year, the IRS imposed a $5,000 fine and late filing fee. Then I realized I screwed up big time and there is light at the end of the tunnel. Upon reviewing my husbands EIN, I see he is a sole member and I should have just filed a regular 1040 tax return with a schedule c. Which would have worked out better for us because I had w2 income. So my husbands business loss would have offset my w2 income and we would actually get a refund. How do I fix this? Should I just file my taxes the right way (married joint with 2 dependents) using 1040 and my husbands schedule for his business and attach a letter explaining my mistake? We do not live in a community property state. Please help.
This is a difficult one to fix because you need to undo a submitted return with a new return.
First, I would file the corrected 1040 showing the page for the single-member LLC. That gets your stuff in the right lane.
Second, I would submit a copy of that return along with a copy of the filing that named your husband a single member LLC and a letter explaining that the partnership return was filed in error to the address that you received the penalty notice from. This may not help - you may still receive further letters. But this will get everything into the system so that you can call the service and ask them to help you.
Good luck!
This is a difficult one to fix because you need to undo a submitted return with a new return.
First, I would file the corrected 1040 showing the page for the single-member LLC. That gets your stuff in the right lane.
Second, I would submit a copy of that return along with a copy of the filing that named your husband a single member LLC and a letter explaining that the partnership return was filed in error to the address that you received the penalty notice from. This may not help - you may still receive further letters. But this will get everything into the system so that you can call the service and ask them to help you.
Good luck!
Go to a good tax professional. They can file your tax returns correctly, reduce your stress from the wrong-filing, and hopefully be able to abate the penalties.
As you are finding out, in many cases, doing your tax returns yourself (including using Do-It-Yourself software like TurboTax) is the most expensive way to have your tax returns prepared.
Thank you for the response! This is very helpful! @RobertB4444