@DreaSan wrote:
To make matters worse, my original accountant disappeared (their business was closed by the IRS), so we hired a new accountant for the LLC. That’s when we discovered we should have filed the LLC taxes along with our personal returns. Now, I’m trying to figure out the best and least expensive way to handle this situation, especially with the potential $2,000 penalty being mentioned. I'm shocked and unsure of what to do.
If you want to DIY, these would be the steps.
First, prepare the 1065 for the LLC. You would use Turbotax Business installed on your own PC. There is also an online option, but apparently it is not available in all states. I would not include any penalty payment at this time. When the IRS bills you for the penalty, you can apply for a waiver/abatement. If you have never owed a penalty before, there is often a waiver granted for first time problems, especially if you have a good reason (like relying on an accountant that was forced out of business by the IRS. It's easier to apply for the waiver when you get the bill, rather than paying the penalty and then applying for the waiver to get it refunded.)
When preparing the 1065, each partner gets a K-1 statement listing that partner's share of expenses and income, so the second step is for each partner to file an amended personal tax return to include the K-1 statement, and pay any additional tax if the business had a profit.
You could certainly hire a tax preparer. In addition to helping negotiate the penalty, they should be able to teach you things you need to know about accounting for income and expenses, handling assets, and preparing next years tax return.
Good luck.
