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New Member
posted Jun 5, 2019 10:21:50 PM

I changed the structure of my business from a sole proprietor to a single member LLC in 2015. Do I have to file taxes for both or just the LLC?

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1 Best answer
Level 4
Jun 5, 2019 10:21:52 PM

A single member LLC is taxed as a sole proprietorship.  For tax purposes you will not see a change in how you report your income on your federal tax return.  If your LLC has an EIN you can include the EIN on your Schedule C.  You can also include the new name of the business if that also changed. 

For state reporting, most states follow the federal guidelines, but not all states do.  I would check with your state to determine if they have separate filing requirements for a single member LLC.  Generally if they do it is an information return with an annual fee rather than an actual income tax return.

5 Replies
Level 4
Jun 5, 2019 10:21:52 PM

A single member LLC is taxed as a sole proprietorship.  For tax purposes you will not see a change in how you report your income on your federal tax return.  If your LLC has an EIN you can include the EIN on your Schedule C.  You can also include the new name of the business if that also changed. 

For state reporting, most states follow the federal guidelines, but not all states do.  I would check with your state to determine if they have separate filing requirements for a single member LLC.  Generally if they do it is an information return with an annual fee rather than an actual income tax return.

New Member
Jun 5, 2019 10:21:53 PM

What if the majority of income for the (1099s) were under my name and my SSN (sole proprietorship)? would it be alright to add the EIN Number and report the 1099 incomes even though I am updating the name of the business to the single member LLC name?

Level 4
Jun 5, 2019 10:21:55 PM

Yes.  Since the single member LLC is being reported on your personal return on Schedule C it will be associated with your name and SSN.  In the interview for the Schedule C you can enter your business name and EIN for the LLC.  When you enter the 1099-Misc you will associate them with your LLC by either entering them in during the business questions or by entering them in the personal questions and linking them to your Schedule C.  I would suggest just entering them under the business section interview.

New Member
Aug 29, 2019 4:01:31 AM

I’m confused by this I changed my business to an LLC this month from a sole prop do I file under each EIN? The LLC is in my wife and I name. Do I file a return for the sole prop for the months we did business from January to August then when the LLC was formed from September to December ?

Level 15
Aug 29, 2019 9:08:52 AM

You need to file a Form 1065 (initial return) for the LLC that started business in September.

 

See https://www.irs.gov/instructions/i1065#idm140538038032800

 

If you happened to make an S corporation election (by filing a Form 2553, which appears doubtful), you would have to file an 1120-S.

 

See https://www.irs.gov/instructions/i1120s#idm140155513575488

 

If you and your spouse own the business as community property (you are in a community property state and did not file an S corporation election), you can treat the LLC as a "qualified entity". In that instance, you could elect for each of you to file a separate Schedule C rather than a return for the LLC.

 

See https://www.irs.gov/pub/irs-drop/rp-02-69.pdf

 

Regardless, you should seek professional tax guidance and, possibly, income tax preparation for this situation.