Tax Year Prior to 2020: LLC Shared between married couple

[kevinecker]

Ok my wife and I are the sole partners in a LLC in MN.  It's a 80/20 split (me as 80%).  In the past, a CPA filed a 1065, a schedule B-1 (for me), and a K-1 for each of us.

I have no idea how TurboTax wants me to do this.  Am I really supposed to create a business for each of us, and split the income/expenses accordingly?? Because it's not really two business, it's one.

EDIT: Also as I continue on in TurboTax for personal income questions, it asks if I've received any K-1s.  Is that in addition to the one TurboTax should be generating, or is it referring to the one that WILL be generated?

[AnnetteB6]

If your LLC was formed as a partnership requiring Form 1065 to be filed annually, then you still need to file Form 1065.  The IRS will be expecting Form 1065 to be filed for the Federal ID number assigned to your LLC.

You cannot divide the business on your joint personal tax return if it was formed as a partnership.  

TurboTax Business is a product available for creating Form 1065 and the associated K-1s for your business.  Then, you would enter those K-1s on your personal return, reporting each of your shares of the income and deductions from the business.

Here is a link for more information about TurboTax Business:  TurboTax Business

[kevinecker]

Why are most responses on these forums an advertisement to purchase another version of TurboTax??? I already HAVE TurboTax Home and Business.  I just don't know how I'm supposed to set it up in the program for it to generate the forms properly.  When I tried to do it as one business it said that because we're married I should set it up as two separate businesses (split income/expenses according to our share) rather than one business owned by both of us.

From what you're telling me that's NOT the way it should be done.  So I'm asking how SHOULD I do it in the program???

[WKins2]

You will need TurboTax for small business to file the partnership return (form 1065). When you have completed the 1065, you will then get the Schedule K-1's that will be for you and your wife, which you will then report on your personal tax return using the version that you have now (TurboTax home and business).

TurboTax home and business is for single member LLC's or sole proprietorship. You need the small business tax version which will help you prepare and file the 1065. 

[kevinecker]

Ok I have the downloaded version of Windows TurboTax Home&Business.  Is the TurboTax Business a separate piece of software entirely? Or is it possible to upgrade??

[ColeenD3]

No, unfortunately you can't upgrade. It is a completely separate program. You will still need a personal program to file your non-business income and deductions.

From our Help article:

Can I upgrade a TurboTax personal (1040) version to TurboTax Business?

No, because their underlying tax forms are different.

The TurboTax Free, Basic, Deluxe, Premier, Self-Employed, and Home & Business series handles personal (1040) returns whereas TurboTax Business handles corporate (1120 and 1120-S), partnership (1065), estate & trust (1041), and homeowner association (1120-H) returns.

If you purchased the wrong product and need to upgrade, request a refund for your software and then purchase TurboTax Business (requires Microsoft Windows