My wife and I started a LLC this year, filing tax return for the first time. We reside in a community property state. When I filed for the EIN, without knowing that our LLC can be treated as a disregarded entity, I picked multimember LLC. As a result, the CP575 we received from IRS states that we need to file Form 1065.
While we like the simplicity of only filing schedule C (same deadline as personal income tax etc.), we want to know if it is possible for us to file schedule C despite of the Form 1065 indicated on CP575. Do we need to file for an entity change with the IRS? Or write a letter to request the correction? Or can we ommit that step and proceed filing schedule C and not Form 1065?
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Your husband-wife LLC in a community property state is a disregarded entity for tax purposes and you can file a Schedule C for it on your joint personal tax return.
The language in the form CP575 is standard for an LLC. There is no other step for you to take.
Thank you for your input. Just want to be extra sure because it does state on the CP575 that I received that '' Based on the information received from you or your representative, you must file the following forms by the dates shown. Form 1065 03/15/2026''. Is that just a standard language that can be ignored in my case? Will IRS automatically recognize my LLC as disregarded entity, formed in community property state, co-owned by husband and wife only without any formal writing or request from me when I filed schedule C on my personal income tax return?
Someone told me that I should file Form 8832 for entity classification election. I am not sure if that's the correct way to proceed, looking for more clarification. Thank you.
As long as you make certain to enter the EIN for your LLC on your schedule C then that should cover the filing for the IRS. You can file an 8832 as well, though, if you want to be doubly careful.
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