If a sole proprietorship converts into a SMLLC in november, how should the taxes be filed?

champ2bro — Wed, 02 Feb 2022 22:37:05 GMT

When I open the SMLLC the EIN of Sole is automatic closed? Should I ask the payers to change my 1099 (made with Sole EIN) to SMLLC EIN?

Thanks

Re: If a sole proprietorship converts into a SMLLC in november, how should the taxes be filed?

GeorgeM777 — Wed, 02 Feb 2022 23:12:01 GMT

Probably not necessary to change the 1099 documents as a sole proprietorship is taxed the same way as a single-member limited liability company. This means that whether you are a sole proprietor or a SMLLC, you will be completing a Schedule C, Profit or Loss From Business. You may have heard the term "disregarded entity" when referring to SMLLC and taxes. That is because the IRS considers a SMLLC a "disregarded entity", meaning there is no separation between the business and its owner for tax purposes (and tax purposes only; legal issues are a different matter). By default, the IRS taxes a SMLLC the same as a sole proprietorship.

However, as a SMLLC, you do have the option to be taxed differently, and perhaps this is something you might consider going forward. For example, while the business income tax obligations of a SMLLC are the same as a sole proprietor, the SMLLC may choose to be taxed as a C Corporation or S-Corporation. This is something you can’t do if you elect to do business as a sole proprietorship.

There are many things to consider before electing to be taxed as a C-Corporation or an S-Corporation and therefore, you should discuss this issue with your personal tax advisor.

Re: If a sole proprietorship converts into a SMLLC in november, how should the taxes be filed?

champ2bro — Thu, 03 Feb 2022 23:56:07 GMT

Thank you! For your help.

topic If a sole proprietorship converts into a SMLLC in november, how should the taxes be filed? in Get your taxes done using TurboTax

If a sole proprietorship converts into a SMLLC in november, how should the taxes be filed?

Re: If a sole proprietorship converts into a SMLLC in november, how should the taxes be filed?

Re: If a sole proprietorship converts into a SMLLC in november, how should the taxes be filed?