Sole Proprietor - How do I add an LLC

[SirDouglasB12]

My primary income is from a W-2 job (file 1040 long form). I also have two small businesses that I have always filed a Sched C on. (One is pet breeding and the other is home repair). This year, I formed an LLC in Montana as a holding corp. It's sole purpose is to hold the titles of a few vehicles. The vehicles are primarily personal but may get some occasional business usage. There is no other business activity associated with LLC.

Neither Sched C business generates much income. With deductions they are generally barely above the break even point. I'm not concerned with running business income through the LLC since there would not be much benefit to it.

Do I even need to list the LLC on taxes? I live in Minnesota, does anything need to be done in regard to state tax filing? Are there any other issues I need to be aware of?

Thank you for help!

[Anonymous_]

The LLC is a disregarded entity for federal income tax purposes and, in any event, you need to report all of your business income and expenses on Schedule C.

I will page @AmeliesUncle for input on Minnesota.

[AmeliesUncle]

It sounds  like the LLC has nothing to do with your business, so I don't think the LLC needs to be factored into  your tax return at all.  Just report your non-LLC businesses as usual.  However, if they are almost always close to breaking even, you may want to consider if they actually are businesses, rather than hobbies.

As for Minnesota, other than an annual LLC registration renewal, nothing needs to be done with an LLC.  And because your LLC isn't doing business in Minnesota I don't think anything needs to be done at all (not even registering it in the first place).

https://www.sos.state.mn.us/business-liens/business-forms-fees/foreign-limited-liability-company-for...

[SirDouglasB12]

Thanks for the informative answer! Very helpful.  Your question about claiming the businesses as hobbies is valid. As I understand it, income needs to be reported and taxed regardless. However, if the income is from a "hobby", you lose the ability to claim any deductions to offset the income. The businesses do have a significant gross income, with accompanying large deductions, hence the barely breaking even. If I could not claim the deductions as a hobby, my tax bill would increase significantly.