@karenblackwell wrote:
...there has to be a more clear way to report it on Schedule C but still reference the 1099-INT
You do not actually want to report bank interest (e.g., savings account interest) on your Schedule C unless you are dead set on paying self-employment tax on that interest income.
Otherwise, that type of interest income should be reported as personal, rather than business, income.
You would still report this interest income under Schedule C. Even though the LLC is considered a disregarded entity for income tax filing purposes, this will not change business interest income (reported on Schedule C) to personal interest income (reported on Schedule B).
You can report this LLC interest income under "other income" under the business income (screenshot).
Please note: Even though line 5 on the Schedule C says "other income not reported on 1099", it is actually referring to 1099-MISC income only and not interest income (reported on a 1099-INT). So this is the appropriate place to report business interest income if you received a Form 1099-INT.
I agree on the principle but do not understand how to report it on Schedule C as line 5 "Other Income" specifies NOT REPORTED ON 1099? Thanks for the clarification.
Even though line 5 on the Schedule C says "other income not reported on 1099", it is actually referring to 1099-MISC income only and not interest income (reported on a 1099-INT). So this is the appropriate place to report business interest income if you received a Form 1099-INT.
You are very welcome and I wish you good luck in all your future endeavors.
This answer seems correct, but is inconsistent with several other Q&As re proper treatment of bank interest from an LLC or sole proprietor's business account.
Conflicting answer: <a rel="nofollow" target="_blank" href="https://ttlc.intuit.com/questions/4370635-if-i-receive-a-1099-int-in-the-name-of-my-llc-and-in-my-llc-s-ein-should-i-report-this-as-business-income-on-sch-c-or-should-i-report-this-as-personal-income-on-sch-b#collapsable_comment_answer_6798812">https://ttlc.intuit.com/questions/4370635-if-i-receive-a-1099-int-in-the-name-of-my-llc-and-in-my-llc-s-ein-should-i-report-this-as-business-income-on-sch-c-or-should-i-report-this-as-personal-income-on-sch-b#collapsable_comment_answer_6798812</a>
Guys which is the right answer? Does it go on schedule C or schedule B?
If the interest is not distributed (unrealized); must it be reported as Income. No 1099 received.
@eds4526 wrote:
If the interest is not distributed (unrealized); must it be reported as Income. No 1099 received.
The interest is required to be reported even if a tax reporting statement, such as a 1099, is not received. It is entirely inconsequential whether or not the interest was distributed to the owners (e.g., members of an LLC, S corporation shareholders, etc.).
I have reported it on Schedule C but the IRS thought the 1099-int was not reported. They thought it was under reported income. It was cleared up with explanation but there has to be a more clear way to report it on Schedule C but still reference the 1099-INT
You might want to put the interest bearing account in the name of your business.
@karenblackwell wrote:
...there has to be a more clear way to report it on Schedule C but still reference the 1099-INT
You do not actually want to report bank interest (e.g., savings account interest) on your Schedule C unless you are dead set on paying self-employment tax on that interest income.
Otherwise, that type of interest income should be reported as personal, rather than business, income.
I have an identical situation to your.
Reported 1099int on Schedule C but the IRS thinks it is under reported income.
How did you clear this up with them? could use your advice.
The purpose of schedule C is to report self-employment income. Unless you are in the business of loaning money, the interest income would be unrelated to your self-employment activities and as such it would be acceptable to report it on schedule B.
This would avoid the problem you have with the IRS not being able to identify it as being reported on your tax return, and would also shelter it from self-employment tax.
I completely understand what you are saying but as a hard money lender it is my primary business and is quite substantial income.
Are you able to have the 1099-Int reported in the name TIN of the business and not your Social Security number?
I have an LLC which earned promo interest when I opened a new bank account. This generated a 1099-INT. Since this is a rental and a flow-thru entity, it gets reported on Sched E on my personal tax return under my SSN. So how do I clear the 1099-Int that came from the LLC TIN?
if this was issued to the LLC, you will need to report this in your business return. The income generated from the 1065 will then pass-through to a K1, which you will use to report the interest on your tax return. Don't try to circumvent the process to directly report this in your own tax return. Use the K1 to report it.
Since this is a single owner LLC, it has always been reported on my Sched E of my tax return, now using the Safe-Harbor for rental property. It hasn't been filed on a 1065 nor K-1. I'm really regretting the $80 interest bonus!
Since you report this LLC in a Schedule E, report your 1099 INT in your personal account even though it has an EIN of a disregarded entity. Normally LLC are reported as Schedule C and you would report this as Schedule C Business Income.
If the IRS ever asks you why this wasn't reported under your EIN, just explain that you do not normally file a Schedule C but a Schedule E , thus you had no place to report this interest income in your Schedule E.
Dave,
Thanks for the info. I will likely do my own taxes this year since my preparer landed in the hospital and everything is so messed up with the Covid virus. I usually draft my return and have him verify and enter, so was perplexed with this new twist.
THANKS so much for your guidance!!!!!
I have the same issue. However, I've already filed my taxes. I have a Single member LLC residential rental business. I file on Schedule E. I have a savings account where I keep rent deposits. The account is under the LLC's EIN and thus the 1099 was issued under the EIN, not my SSN. I felt it was better to file on Schedule C under other income and with the EIN so that it would match up. ANd yes, I see where a couple folks were questioned about this by the IRS. Hopefully I made the right decision. I mean it was only $13.... But for some reason I keep thinking about it. Would like to know for next year which is best!
@pnored -- I'm in this situation now, with 1099-INT interest issued to my LLC's EIN--did reporting it on Schedule C work out for you, or did the IRS follow-up, saying that it was under-reported?