@nchabra7 wrote:
Thank You for your replies. I, like many others, find them very helpful. Issue I am having is I purchased the Home and Business version of the software. We are husband and wife LLC with one property in Florida. The property needed to be re-furbished and the expenses were more than we could handle. We used some of our primary house equity for line of credit and I had to take up some side consulting work to help us out. At the advice of others, the consulting work paid the LLC. I am thinking the LLC is more of hassle then help in regards to the level of paperwork.
What are my options:
1. Can I ignore the LLC and just go straight to Sch C and Sch E? Can I dissove the LLC for future taxes?
2. Does only the income from the consulting is to be entered into Form 1065? That is income I performed so does 100% allocation for me and 0% for my spouse. Then proceed with regular tax forms.
3. Whatever you many suggest...
Thank You for your time
1. "Can I ignore the LLC" No. Or maybe hell no. You created the LLC under the laws of the state of Florida, you have to deal with the consequences.
Can I dissove the LLC for future taxes? Probably. That will be a matter for state law. You should contact an appropriate expert in Florida. You would need to file at least one more 1065 for all or part of 2020.
2. Does only the income from the consulting is to be entered into Form 1065? That was probably a mistake. Where did you get this advice? You can have an LLC for one business venture (such as managing rental property) and still be a schedule C sole proprietor for a different business venture. But since you combined them, yes your consulting income is now LLC income.
Form 1065 can only be prepared using Turbotax Business. This is a separate program from H&B, and is only available for PC, not online and not for Mac. As part of the 1065, you will issue a K-1 statement to each partner that goes on the personal tax return.
Note that if you are only working on your 1065 now, it was due March 15 and the deadline was not extended for the coronavirus. I believe the late filing penalty is $195 per month per member. I think you need to take all your records to a professional (and apologize for not involving them sooner). (You may be able to request a one-time penalty abatement if this is the first time you have owed a penalty.)
