Filing a tax return for a new California LLC with no activity

[sezenvatansever]

I’ve started a new single-member LLC in California in October 2022 but it was inactive during 2022: no income, just documentation costs to form it. While I filed my 2022 tax return (married, jointly), I didn’t include my LLC since it was inactive during 2022.
Do you think i did this right? If I made a mistake, how can I fix it now? I would be very grateful if you could guide me to fix it.

[JanetKT]

@sezenvatansever 

I home you are having a great day! You don't say if you made an S Corp election or not.

However, the following two links should be helpful if you are a single member LLC:

https://www.ftb.ca.gov/file/business/types/limited-liability-company/single-member-llc.html

https://www.ftb.ca.gov/forms/2022/2022-568.pdf

You are still required to file Form 568 each year. So you should file it as soon as possible.

Thanks for joining us for our live event!

Janet CPA

 

[sezenvatansever]

Thanks for your prompt response, @JanetKT 

I didn’t choose S Corp.

How can I file the form 568 for 2022 using TurboTax? I think I will need to use TurboTax amendment, perhaps. Is there an instructions page for that?

Best,

Sezen

[DashonnonH]

There a few things to address if you are registered as an LLC in CA

Filing requirements

If your LLC meets one or more of the following conditions:

• Doing business in California
• Registered with the SOS

Then your LLC must:

• Pay the $800 annual tax
  • By the 15th day of the 4th month after the beginning of the current tax year.
  • Use Limited Liability Company Tax Voucher (FTB 3522)

Exceptions to the first year annual tax

For tax years beginning on or after January 1, 2021, and before January 1, 2024, LLCs that organize, register, or file with the Secretary of State to do business in California are not subject to the annual tax of $800 for their first tax year.

• Estimate and pay the LLC fee
  • By the 15th day of the 6th month after the beginning of the current tax year.
  • Use Estimated Fee for LLCs (FTB 3536)

If your business had no income, you would not file this form; you would not need to pay estimated taxe.

• File Limited Liability Company Return of Income (Form 568) by the original return due date.
  • If your LLC files on an extension, refer to Payment for Automatic Extension for LLCs (FTB 3537)
  • Visit Limited Liability Company Tax Booklet (568 Booklet) for more information. 

If you have no income you DO need to file a return of income for 568

https://www.ftb.ca.gov/forms/2021/2021-568-booklet.html

• If you have income or loss inside and outside California, use Apportionment and Allocation of Income (Schedule R) to determine California source income.
  • Visit Instructions for Schedule R for more information.

https://www.ftb.ca.gov/file/business/types/limited-liability-company/index.html#Overview

[DashonnonH]

Hi, yes Turbo Tax does support single member LLC filing of form 568.  When you choose "Amend", go to your CA state form. As you go through the CA return Turbo Tax will show you a business summary, please select edit to answer a few questions and fill in your form 568. Some info will be auto-populated for you. Fill in the necessary info.

Regards, 

Dashonnon  

[sezenvatansever]

Hello,

Thanks for the detailed response.

I understand that I need to file form 568 for 2022. But my question is how should I do that? Can I file it using TurboTax’s “Amend using TurboTax online” tool?

PS: I didn’t pay the $800 annual tax for the first year (2022) but I’ve paid it for this year (2023).

[sezenvatansever]

Thanks a lot @DashonnonH !

[DashonnonH]

@sezenvatansever You're welcome!