Dissolving NJ Single Member LLC - What will the IRS need? What will I need to file taxes?

[ughdeeb]

Hi there,

In 2024, I received a W-2 as well as 2 1099-NECs for some contract work. The contract work was paid to my NJ Single Member LLC. 

I have just filed my taxes for 2024, but I am now realizing I don't plan on doing any more contract work through my Single Member LLC and I plan to dissolve the business soon. I have just closed my business checking account and took an owner's draw from my business account to my personal account just prior to closing it. Note that I already filed my taxes for 2024 and no additional income has gone into the Single Member LLC since filing. 

My questions are:

What will I need to report or do for next year? I reported all income of this contract work and paid all taxes for 2024 and the business will not be generating any more income up until it is officially dissolved. What tax documents will I need to fill out next year, if any? 

Is this a situation that Turbo Tax can handle? 

Since my Single Member LLC is technically a disregarded entity, perhaps there is nothing to fill out?

Any help is greatly appreciated! 🙏

[MaryK4]

You will need to report the income and expenses for 2025 on your Schedule C.  If it is the same "business" you can include it with any future activity you do without the LLC.  Make sure all future businesses know that you are no longer using the LLC (provide a new W9 if necessary).  

Yes, TurboTax can handle it0 just do your entries the same way you do now, and you can adjust the business information if needed (remove the DBA, EIN for the LLX etc.)

There is nothing more than you would have to report to the IRS; but to make it official, it is best to dissolve the LLC with your state secretary of state.  Because you closed the business account, if you use any personal accounts for any additional expenses, be sure to keep good records of the transactions.  

[ughdeeb]

Hi, thank you for your reply.

There won't be any income and expenses for 2025 at all. I have concluded all contract work in mid-2024. So do I just report 0, or report nothing at all for 2025?

[MaryK4]

If there will be nothing to report in 2025, the 2024 will be the final Schedule C and you do not file a Schedule C for 2025.  Note that you may have to file a 4797 Sale of Business Property for any property that you were depreciating or used exclusively for the business in future tax years if you sell any property.  This is most important of you used a 179 deduction for business use of the car, because you would have to report now because your business use dropped below 50%.   Also if you deducted home office expenses, you would have to report if you sell your home.  Another thing I did not mention is to contact the IRS to cancel your LLC EIN.  

See Closing a business.  @ughdeeb 

[ughdeeb]

i appreciate your help! thank you! 😁