California 568 SMLLC - Schedule IW - interest, dividends, etc

[demens13]

TurboTax does very little to help fill out the 568 from.

SMLLC only needs to file side 1, 2, 3 and Schedule IW. Schedule IW has questions regarding interest, dividends, capital gains, etc. It's not very clear to me if these are specific to the business itself (as in, business savings account, business investments, etc - which would make sense) or this is specific to the member.

Below is a snippet for 568 booklet. 

Disregarded entities that do not meet the filing requirements to complete Schedule B or Schedule K should prepare Schedule IW by entering the California amounts attributable to the disregarded entity from the member’s federal Schedule B, C, D, E, F (Form 1040), or additional schedules associated with other activities. For example, if an SMLLC has IRC Section 1231 gains, the SMLLC will need to get the amount from the schedule containing that information, such as Schedule D-1, and enter the amount on line 14 of the Schedule IW.

Who is the disregarded entity, me or the SMLLC? I may be misunderstanding the text, but it sounds like they want me to add my personal (nonbusiness) income from investments, interest, etc to 568, i'm just not sure how that makes given given that its....non-business and has nothing to do with the LLC?

[KathrynG3 · Accepted solution]

Yes, the questions about interest and dividends pertain only to the business. 

The disregarded entity is the SMLLC. 

No, while you will report your personal (nonbusiness) income elsewhere in the return, it is not reported on Form 568.

You need to file this, but you do not need TurboTax Business for single member LLCs. TurboTax does let you e-file the rest of your return and allow you to mail the 568 separately.

As TurboTax Expert AndreaC1 found:

TurboTax Business only handles the multi-member LLC, not single-member. If you are using TurboTax Home & Business desktop version or Self-Employed online version, the Form 568 has to be printed and mailed.

Form 568 for single-member LLC's can't be e-filed in any of the TurboTax product versions.

The State of California’s Franchise Tax Board will allow you a waiver based on a few reasons, and due to technology constraints of the software you are using, you can request the e-file waiver.

Follow these steps to get Form 568 and file it directly with the Franchise Tax Board of California: 

• Go to California FTB Business Entity E-file Waiver Request and 
• Request an e-file waiver
• Paper file this form: print and mail Form 568 to this address:

FRANCHISE TAX BOARD 

PO BOX 942857 

SACRAMENTO CA 94257-0501

[demens13]

that makes sense, thank you.

I actually ended up adding interest income that was nonbusiness to the 568 form, however it's small enough not have any impact on the return. I will not do this next year.