Im a little confused which version of turbo tax are you referring to, to do this?
I'm not understanding the confusion. You already know that a single member LLC is a disregarded entity, and that such business income is reported on SCH C as a part of your personal 1040 tax return. So you use the same version you are using 'RIGHT NOW" to report your LLC income and expenses on SCH C as a part of your personal 1040 tax return. It's physically impossible to do a personal 1040 return or a SCH C with TurboTax Business. You need either TurboTax self-employed if using the online version, or TurboTax Deluxe or higher of the CD/Desktop version of the program.
To report the sale or other disposition of your single member LLC doesn't require any special version or anything. Use the same exact version you would use if you were not closing the LLC.
I only need the two versions to do all of this right? 2018 premier for my self and wife, rental and 2018 business for the scorp?
So I take it you use the CD version of TurboTax that you physically install on your computer. You will use premier to report your single member LLC income, expenses, and the closure/disposition of that business on SCH C, as well as for your rental income/expenses on SCH E. THen you will use TurboTax Business (different from Home & Business) to start and report your S-Corp stuff.
The llc it self hasn't closed per say.. its just being treated differently by the irs this year. correct?
No, that's not correct. As far as the IRS is concerned ***ON PAPER*** the LLC is closing and will cease to exist. Remember, the LLC is a disregarded entity, whereas the S-Corp is *NOT* a disregarded entity. the S-Corp is considered a completely separately taxable entity. That's why you are required to file a physically separate tax return for the S-Corp. If your state taxes income, then the S-Corp will also file a physically separate tax return with your state too.
To further clarify, your LLC is a disregarded entity. That means the IRS does not recognize it as anything separate. All income earned by the LLC is considered and treated as income earned by you. Period. That's why it's reported on SCH C as a part of your personal tax return. TurboTax Basic through TurboTax Home & Business (or self-employed if using the online version) are all used for filing the personal tax return of a living, breathing human.
TurboTax Business is used to prepare and file a tax return for what the IRS recognizes as a completely separate, non-living, non-breathing, separately taxable entity such as a partnership, S-Corp, C-Corp, Estates, and Trusts.
When you complete your 1120-S corporate return, the corporation will be issuing you a K-1 for you to use on your personal tax return. Additionally, since the S-Corp is considered a separate entity, you can also be an employee of that S-Corp. If so, then in addition to the K-1 the S-Corp would also issue you a W-2. So if you are and officer of the corporation (and you are as the sole owner of it) and an employee, you will need both the W-2 and the K-1 before you can finalize your personal 1040 tax return.
