What to do if we've been making income since before becoming an LLC?

[lastround360]

Hello, so I am a partner of a multimember LLC in which I own 30% and the other partner owns 70% we've been bringing in income since the start of 2021 (Jan 1st), but we just became an LLC midway through November. We have not paid any taxes at all yet for the entire year. When filing out my tax forms (1065, etc) in TurboTax business, do I report the income and expenses for the entire year or only those since we officially became an LLC? When we do go to pay taxes online, will we pay them as an LLC or as if we're self-employed? Thanks!

[Critter-3]

You and your partner really need to sit down with a local tax pro and get educated on what you have done and what needs to be done correctly and then be educated on what needs to be done going forward.  

[lastround360]

Doesn't answer my questions.

[Critter-3]

Sorry but there is no simple answer for your complicated situation.   So I highly recommend you seek local professional assistance so you get the correct answer for your state and the fed returns.  

[lastround360]

I'm not asking about state taxes, we don't owe any in Washington. Just need to know what to do with federal. I'll wait for someone else to reply. 

[rjs]

We can't answer your question because we don't know enough of the details. The question is not as simple as you think it is. Depending on the nature of your business, how you were paid, and what understandings you had between you, you and your partner might have been self-employed before you formed the LLC, or you might have already had a partnership, at least for tax purposes, even if you didn't have a formal partnership agreement. And you can't even begin discussing how you make the transition to an LLC until you clarify what you are transitioning from.

Washington does not have a personal income tax, but it does have a tax on gross receipts of a business, the Business and Occupation tax. Your partnership or LLC is a business, so you are going to have to pay the B&O tax.

So I will second Critter-3's recommendation that you meet with a local tax professional who can review your entire situation and figure out how you have to handle it. You are not going to get the answer here.

[Carl]

we've been bringing in income since the start of 2021 (Jan 1st), but we just became an LLC midway through November.

Again, not enough information to work with. For example, if "we" became a multi-member LLC in November, then what were *we" before November?

[lastround360]

I'm not sure what we were before becoming an LLC. We just sell videos online. I'm guessing we were a partnership then? We never declared ourselves as one though. I get my situation may be too complex for guidance but could someone just tell me whether I can pay/file taxes as an LLC for the entire year (one 1065 form) or do I need to do this twice; once for the period before we were an LLC, and once for after?

[rjs]

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@lastround360 wrote:

I'm guessing we were a partnership then? We never declared ourselves as one though.

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As I said above, "Depending on the nature of your business, how you were paid, and what understandings you had between you, you and your partner might have been self-employed before you formed the LLC, or you might have already had a partnership, at least for tax purposes, even if you didn't have a formal partnership agreement."

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@lastround360 wrote:

could someone just tell me whether I can pay/file taxes as an LLC for the entire year (one 1065 form) or do I need to do this twice; once for the period before we were an LLC, and once for after?

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No one here can tell you that. The tax professional that you consult will be able to tell you that after he or she reviews all the details of your situation, including any pertinent documents and records.