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Tanya_R
New Member

LLC and sole proprietor, same household

I have been running a small business for 5 years. My husband had a regular job and got a W2 each year. This year in March he started his own business. It is an LLC, S corp with him and myself as members. I still have my own business. He will get a W2 from his previous employer as well. Can we still file jointly? Does he have to file for his company and personally? What "version" of turbo tax do we need? In the past we have used home and business.

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2 Replies
Carl
Level 15

LLC and sole proprietor, same household

Owning a business of any type in any capacity has absolutely no effect on your filing status for your personal 1040 return. You still file a joint 1040 no matter what.

Since you elected to have your LLC "treated like an S-Corp" you must understand that this is for *tax* *purposes* *only* and nothing else. When a business owner makes this election and files the 2553 with the IRS to have the LLC treated like an S-Corp, then the business is required to "act" like an S-Corp. That means you must follow all the rules, requlations and laws that govern S-Corps at both the federal and state level. Therefore to avoid the potential for confusion in the future (when it comes to taxes only) you might as well just say "I/we have an S-Corp" and leave it at that.

The S-Corp is required to file it's own physically separate tax return on IRS Form 1120-S. For that you have to use TurboTax Business (different from Home & Business). TurboTax Business is not available as an online product or for MACs. It's for the WIndows operating system only. You can purchase the CD/download at https://turbotax.intuit.com/small-business-taxes/

Understand you need to complete the 1120-S return first, before you can even start your personal 1040 joint tax return. That's because the S_Corp will issue a K-1 to each owner, and each owner will require that K-1 in order to complete their personal 1040 tax return. IT doesn't matter if the owners are married to each other and filing joint either. Each individual owner requires their own individual K-1 so they can correctly report their share of the business earnings or losses on their personal return.

Finally, understand that the 1120-S Corporate Return is due to the IRS by March 15th. Not Apr 15th like it is for your personal return. The late filing penalty for a corporate return is $200 per month, *per* *owner*. So for the two of you as owners, file on March 16th and you'll pay a $400 late filing penalty. *DON'T* *BE* *LATE*!

Now, since this is your first year dealing with this stuff I would highly recommend you seek professional help for the corporate return for "AT" "LEAST" the first year. Perfection in that first year is not an option; it's a must. Please seek professional help instead of discovering in hindsight that that cost of that professional help seems like a pittance when compared to the fines and penalties that could be imposed for doing things wrong.

 

HelenC12
Expert Alumni

LLC and sole proprietor, same household

Yes, you will still be able to file jointly. However, the S-Corp requires you complete a business tax return before completing your personal income tax return(s). 

  • The S Corp requires you to file form 1120-S and issue K-1's to each of you since you are both shareholders

 

 

 

 

 

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