How to efile Form 568 for a husband/wife LLC treated as disregarded entity?

[a2sing]

I have two Schedule C's and need to generate a single 568 for the LLC/husband-wife partnership.

Is this possible to do this with Turbo Tax Home and Business?

I did what DawnC suggested: "If you split them, you can indicate that one of them is owned by a SMLLC and answer no to the SMLLC question on the 2nd one." but the 568 generated obviously has information from 1st of the two Schedule C's.

Any workarounds? Many have asked this question... Thanks much

[kjhumra]

I'm using TurboTax 2020 Home & Business and its telling me to split our husband and wife owned LLC into two separate businesses. I don't get the option to ignore this "suggestion" and am forced to do so. When I input the split 50% numbers for each of us for separate Schedule C's, I don't get any Form 1065 generated. And the info doesn't carry over to the California return either and I don't get any Form FTB 568 generated either.

This doesn't seem right to me, as the FTB website clearly states: "If your LLC has one owner, you’re a single member limited liability company (SMLLC). If you are married, you and your spouse are considered one owner and can elect to be treated as an SMLLC. We require an SMLLC to file Form 568, even though they are considered a disregarded entity for tax purposes. They are subject to the annual tax, LLC fee and credit limitations."

Could this be a bug in the software? Or do I trust it and file anyway as the software says there are no errors. Any help would be much appreciated.

[MarilynG1]

Yes, a husband/wife treated as a 'disregarded entity' for tax purposes with file with two Schedule C's in their personal return.   

This will generate a single 568 in a California return, but you need to indicate that it is a single-member LLC in your California interview. 

Click this link for info on Form 568 for Disregarded Entity LLC. 

[kjhumra]

Thanks for the response, but if the 568 is only generated by one of the two Schedule C's, then the values would be half of the total. Do we then have to manually update the information on the 568 for the full amounts before filing?

[Taxable]

My notes from last year:

TurboTax cannot generate form CA 568 properly for split husband/wife LLC!

It generates a CA 568 with only HALF of the values.
Most fields can be edited to correct the problems but some fields are read only.

This year we ignore TurboTax buggy CA 568 and fill the form out manually.
Downloaded CA 568, filled in and sent via mail.

* MUST REQUEST A WAIVER TO SEND CA 568 VIA MAIL! *

TurboTax doesn't support CA 568 eFile anyway.

[Sixgunsammy]

There is an exception for 1065 reporting in community property states.

[DanielV01]

@Sixgunsammy.  You are commenting on an older thread, and if you have a question, you may want to post as a separate question.  Having said this, you are correct.  In a community property state, the IRS does allow for a married couple to file their LLC as a joint venture because the total profits must be split 50-50 between the two.  For your Federal Return, you split all income and all expenses 50/50 on two Schedules C.  You can designate one of the two as an LLC, and that should prevent any issues.  In the California return screens, if there are fields to override income amounts, then do so.  It may also be necessary to send California both Schedules C so they can have the full income reported.  But you don't want to file 2 Forms 568 because it is only one LLC, and therefore only one LLC Franchising Fee.  But since that fee is dependent on income levels, you will want to make sure that the state has the full income picture.