How should a husband-wife LLC file?

[JJ95]

@ScruffyCurmudgeon  - It sounds like there should be Schedule E at the very least, why Schedule C?

Hoping you claimed depreciation. I can't advise whether you should go back and file a partnership return, it would be the proper thing to do but there will be late filing penalties by now, and all else being equal should have the same result in most cases.

[Rick19744]

@nstillwell You have a number of issues that need to be considered:

• You do have a mess here and I would probably recommend you meet with a tax professional to help you navigate these issues.
• You have filed incorrectly since the beginning of your rental journey.
  • You should not have filed any tax return until you actually had your rental property and began, or at least advertised your building, to rent; you don't have a trade or business until that time.
  • So 2019 is incorrect in that you should not have taken any expenses; a side note, using Schedule C was also not correct (rental in general is filed on Schedule E).
  •  Based on my previous comment, 2020 should not have been filed since you don't have any operations.
  • When you purchased the building, and if you wanted it in the LLC, it should have been titled in the name of the LLC.
  • 2021 is technically the first year you should have filed a form 1065; this assumes you began renting the building.
  • Once again, filing on Schedule C is not correct.
  • You need to go back to 2021 at a minimum and file a form 1065 along with amending your 1040.
  • As a result of the previous comment, your 2022 tax return is not correct.
  • All of the above impacts your VA return as well.
  • You can't file your 2023 return until you clean up the LLC and also file a 2023 LLC tax return.
• As you can see, there are a number of issues that need to be worked through and having a one on one with a tax professional is the way to go.  Don't be penny wise and pound foolish here.  You are already exposed to potential penalties and using a tax professional to help you minimize and maybe get some penalties waived, is money well spent.