Single Member LLC Etsy/Square

[Green Machine 135]

Hello,

I mistakenly opened an LLC in my name when it should have been in my wife's. We have amended the articles of incorporation and sent 8822-b to IRS (and state's DOR) to change the responsible party.

Assuming all of this clears up and she is the sole owner of a single member LLC (taxed as a disregarded entity), should she list the EIN of the LLC or her SSN on Etsy, Square, etc for 1099-k purposes? We are going to open a bank account for her single member LLC (using the LLC's EIN) once the IRS switches her as the responsible party for the LLC, but want to make sure we are using the correct TID.

I appreciate any help!

[rjs · Accepted solution]

It doesn't matter whether a 1099-K is issued to her SSN or her EIN. It's probably better to use the EIN for payments, to avoid giving out her SSN unnecessarily.

[Green Machine 135]

@rjs Thank you so much! So by changing the responsible party with the IRS of a single member LLC to her, she now owns the EIN and it is fully associated to her SSN for tax reporting? So regardless of the way she reports, the IRS knows its her?

Is there a place to put the LLC's EIN on schedule C along with her SSN so they know its tied to her?

I appreciate it!

[rjs · Accepted solution]

When you enter the business information for Schedule C in TurboTax it will ask if you have an EIN, and you enter the EIN there. TurboTax will put the EIN on the Schedule C. It will also ask who owns the business, you or your wife. It already has her SSN, so you don't have to enter it again.

[Green Machine 135]

@rjs Perfect, thank you!

Last question, If you are willing! (I promise)

By submitting IRS form 8822-b and changing the responsible party from me to her since it is a single member LLC, the IRS will know she is the new owner, correct? We wouldn’t need a new EIN?

I appreciate it!

[rjs]

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@Green Machine 135 wrote:

By submitting IRS form 8822-b and changing the responsible party from me to her since it is a single member LLC, the IRS will know she is the new owner, correct? We wouldn’t need a new EIN?

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I don't know. I suggest that you consult a local tax professional.

Keep in mind that a single-member LLC is disregarded for federal income tax purposes. The LLC and the owner are considered one and the same. If you completed the application for the EIN correctly, the EIN was issued to you, not to the LLC. I'm not sure what the significance is of the "responsible party" for an EIN issued to an individual. I don't see how your wife could be the responsible party for you. If the original EIN belongs to you, then I think your wife needs an EIN in her own name if she is now the owner of the LLC. But as I said, I think you should consult a tax professional.