changed from sole proprietor to single member LLC mid year

[macwolf]

Greetings,

I have a small business I have been running for a number of years as a sole proprietor.  I have two employees.  In 2021 I formed a single member LLC and obtained a new EIN.

When filing for 2021, do I need to have two schedule Cs?  One for the sole proprietor until mid year and then one for the LLC after mid -year?

Thanks!

[AliciaP1]

No, for tax purposes, a sole proprietor business and a Single-Member LLC are the same thing.  You only need to report all the business activity on one Schedule C and list the LLC name and EIN on the Schedule C.

[macwolf]

Okay, thanks.  Was worried that since each entity has its own EIN that I needed to account for each.

[tmltabisz]

this was my situation as well.  Happy to know it was that simple!

[VolvoGirl]

UNLESS your Single Member LLC is setup as a S Corp.  then you need to file a separate 1120-S business return for it.

[macwolf]

I reached out to my CPA about this.  He stated to me that I needed to file a Schedule C for both the sole proprietorship which in my case ended June 30, 2021.  And file a seconds Schedule C for the new single member LLC for the balance of the year July 1, 2021 to December 31, 2021.

I have two different EINs.  One from the Sole Proprietorship and one from the single member LLC.  Not sure if that makes a difference or not.

[ZoltanB45]

Since you have 2 ein's, it would be safer to create 2 schedule C's. Split the activity by the date change.