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Level 2
posted Mar 27, 2022 6:53:42 PM

Do I need to enter bank interest for single member LLC for California Form 568?

I have a single member LLC, disregarded entity, in California and need to file Form 568. I have found the part in TurboTax that helps me fill this out. But I am unsure what to do for this specific case below:

 

I have an online savings bank account for my LLC (using its EIN) that happens to have paid a little bit of interest (around $75).

 

This is reported this on my main tax return so the taxes are being paid for it. But I am unclear if I additionally need to enter the interest earned value on Form 568. I think it would go in Schedule K line 5, but reading the instructions for Form 568, I am under the impression that I skip Schedule K for single member LLCs.

 

This amount of interest will not change the amount/outcome I have to pay according to Form 568, as my total income for the LLC is below the threshold such that the $800 annual tax still covers everything. 

 

What is the correct thing to do here?

0 1 371
1 Best answer
Expert Alumni
Mar 28, 2022 8:30:02 AM

Correct, you can skip filing Schedule K if any of the following are true: 

 

"Schedule K (568) Only

 

Disregarded entities – Schedule K is only required to be filed if any of the following is met:

  • The income or loss amount reported on Schedule B, line 1 or line 3 through line 11, is $3,000,000 or more.
  • The “Total distributive income/payment items,” Schedule K, line 21a, is greater than or equal to $3,000,000 OR less than or equal to $-3,000,000."

Thus, if your income or loss as reported on Schedule B does not meet the thresholds referenced in the above quote, the Schedule K is not required and you do not need to file it.  Moreover, as you indicated in your post, you are have included the bank interest on your personal tax return.  

 

The above quoted material was obtained from the CA Franchise Tax Board website at:  2021 Instructions for Form 568 Limited Liability Company Tax Booklet.

 

@befuddled4

1 Replies
Expert Alumni
Mar 28, 2022 8:30:02 AM

Correct, you can skip filing Schedule K if any of the following are true: 

 

"Schedule K (568) Only

 

Disregarded entities – Schedule K is only required to be filed if any of the following is met:

  • The income or loss amount reported on Schedule B, line 1 or line 3 through line 11, is $3,000,000 or more.
  • The “Total distributive income/payment items,” Schedule K, line 21a, is greater than or equal to $3,000,000 OR less than or equal to $-3,000,000."

Thus, if your income or loss as reported on Schedule B does not meet the thresholds referenced in the above quote, the Schedule K is not required and you do not need to file it.  Moreover, as you indicated in your post, you are have included the bank interest on your personal tax return.  

 

The above quoted material was obtained from the CA Franchise Tax Board website at:  2021 Instructions for Form 568 Limited Liability Company Tax Booklet.

 

@befuddled4