I filed an LLC Federal 1065 and South Carolina 1065 for rental real estate. I am not a resident of SC. The SC 1065 withheld 5% non resident withholding tax, but the SC tax withholding was not reported on the K1. When I did my individual federal 1040 and SC1040, I had nothing to include that nonresident SC taxes were withheld, so I was taxed again on the SC1040 of around 2%. Double taxed! I read on the SC Department of Revenue (DOR) site that I should have filed a 1099-MISC to report the SC taxes withheld, but if I report the income on the 1099-MISC, I will have forms reporting income twice, on a K1 and a 1099-MISC for both me and my wife.
From the SC DOR website
"By the 15th day of the third month following the end of the partnership's taxable year, you must provide each nonresident partner with a federal 1099-MISC with SC Only written at the top, showing the amount of income and tax withheld. "
Is there any easy way that I can just include the nonresident SC taxes withheld on the SC1040 without the K1 including taxes withheld or an additional 1099-MISC reflecting taxes withheld (and income)?
How can I avoid being double taxed?
Thanks
