My wife and I opened an LLC in 2020 with 50/50 ownership. We never used the LLC. Do we need to file a separate tax return for the business or can we file under our joint?

[Mike9241]

if you never used it there's nothing to report.  if you do start to use it in a business, then the LLC must file a partnership return. 

[sjacobs360]

Great, thanks! Would the partnership return be filed under our joint tax return or would that be a separate return?

[ToddL99]

Please clarify - in what state is the LLC organized/registered?

[Critter-3]

Sorry to be blunt but if you don't know the answer to that question you need to RUN to a local tax professional to get educated on what you have done ... if you did get the EIN from the IRS as a multimember LLC then the issuance notice told you to file a form 1065 as a partnership which was due 3/15/21 (even if you have no income to report)  so not only do you need to file a form 1065 but you also are very late in doing so and the penalties are adding up fast... $205 per member per month.  Seek local professional assistance ASAP. 

[sjacobs360]

It is registered in texas

[ColeenD3]

It depends how you chose to have it treated. Since you live in a community property state, you are allowed to have an LLC be considered a Qualified Joint Venture. If you defaulted as a Schedule C, you don't have to do anything.

A qualified joint venture is a joint venture that conducts a trade or business where (1) the only members of the joint venture are a married couple who file a joint return, (2) both spouses materially participate in the trade or business, and (3) both spouses elect not to be treated as a partnership.

 A qualified joint venture, for purposes of this provision, includes only businesses that are owned and operated by spouses as co-owners, and not in the name of a state law entity (including a limited partnership or limited liability company)

Spouses as Joint Venture LLC Owners

However, if the joint venture is incorporated as a legal entity -- such as an LLC -- under state law, the IRS qualification is not allowed and the venture is treated as a partnership unless the married joint venture owners live in a community property state.

[sjacobs360]

Thanks @ColeenD3 . How do I determine if we opted for the qualified joint venture? I checked our certificate of filing and didn’t see anything about this.

[ColeenD3]

This has nothing to do with how you filed your LLC. The facts that 1) you are husband and wife, 2) that you live in a community property state, and 3) that you did not elect to be taxed as a Partnership all qualify you.

[Critter-3]

Start by looking at the EIC confirmation receipt from the IRS ... what do they expect you to file ?   Do they tell you to file a form 1065 by a certain date ... look in the middle of the first page.   If they expect a 1065 then you need to file a 1065.   

Did you save a copy of the SS-4 form when you applied for the EIN ?   Which boxes did you complete ?  Which entity did you apply for ?