Suitable Turbotax Product - My wife and I have W2 job and we have two rentals homes through 2 individual LLCs.

[ChristoThomas]

Hello All - I would like to know whether I am using the correct product for tax filing. My situation is as follows,

1. We both have W2 Jobs
2. Both have Brokerage accounts
3. Rental Homes through Multi-member LLC (Wife and I 50/50)

I spoke to support in Turbotax and Purchased Turbotax Home and Business, is this the right product (considering a multi-member LLC)? Home and Business indeed ask for a Business name and EIN but I didn't see the deduction section like office space n all. 

If I purchased the wrong product and need to switch to Turbotax Business, how can I do it? TurboTax Business is only for Business? Can I do my personal tax too or do I need to buy a separate product for that? 

Appreciate your answers  and Respectfully - Christo Thomas

[DoninGA]

The Business Edition is used for a multi-member LLC. 

The Business Edition cannot complete a personal tax return, Form 1040, so you will need the Home & Business edition you purchased for your Form 1040.

[ChristoThomas]

Thank you, This means the product purchased can be used only for Personal (1040 - W2 and Brokerage) , i need to go get a Business one for doing the rentals. 

[DoninGA]

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@ChristoThomas wrote:

Thank you, This means the product purchased can be used only for Personal (1040 - W2 and Brokerage) , i need to go get a Business one for doing the rentals. 

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Correct.

[Opus 17 · Accepted solution]

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@ChristoThomas wrote:

Thank you, This means the product purchased can be used only for Personal (1040 - W2 and Brokerage) , i need to go get a Business one for doing the rentals. 

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Yes, BUT...

If you live in a community property state, disregard the above.  When you have a two-member LLC in a community property state and the only members are spouses, this is reported as a special type of disregarded entity.  Each spouse would file a schedule C in their own name reporting half the income and half the expenses from the LLC.  (Or two schedule Cs for each spouse if there are two separate LLCs.). You would use Turbotax Self-Employed online, or Turbotax Home and Business installed on your own computer. 

If you are not in a community property state, then each LLC files a form 1065 partnership return.  This requires Turbotax Business which is only available to install on your own PC, there is no online or Mac version.  Each 1065 partnership return will prepare and issue a K-1 statement to each partner.  The K-1s are entered on your personal return, and you can use Turbotax Premier online, or Deluxe on the desktop, no need to upgrade to the self-employed version.

Important note: the deadline for 1065 returns was March 15, not April 15, and the late fees are up to $200 per month per partner for each return.   If this is your first year, you can probably apply for penalty relief as a first-timer, once you get a bill from the IRS.  It is too late to file for a deadline extension for form 1065. 

[ChristoThomas]

Thank you, Sir - I live in Iowa and I don't belong to Community Property states. I ended up purchasing the Turbotax Business and completed 1065 for each property and K1 for each of us (a total of 4 K1s for me and my wife for 2 properties under 2 LLCs).

While I was preparing I came to know the deadline was March 15, still I filed Federal through E-file and I got a message saying it is accepted. 

Do I need to send the paper filing in the mail even after they accepted the e-filing? When I printed the documents, I got the 7004 form as extn for filing. I guess I need to send it by mail. IRS going to send me the bill for 200 for late filing? 

Also, there is no e-filing for Iowa, I have to send it by mail. 

Really appreciated your valuable feedback

Respectfully - Christo Thomas 

[Opus 17 · Accepted solution]

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@ChristoThomas wrote:

Thank you, Sir - I live in Iowa and I don't belong to Community Property states. I ended up purchasing the Turbotax Business and completed 1065 for each property and K1 for each of us (a total of 4 K1s for me and my wife for 2 properties under 2 LLCs).

While I was preparing I came to know the deadline was March 15, still I filed Federal through E-file and I got a message saying it is accepted. 

Do I need to send the paper filing in the mail even after they accepted the e-filing? When I printed the documents, I got the 7004 form as extn for filing. I guess I need to send it by mail. IRS going to send me the bill for 200 for late filing? 

Also, there is no e-filing for Iowa, I have to send it by mail. 

Really appreciated your valuable feedback

Respectfully - Christo Thomas 

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You can't file form 7004 to request an extension after the deadline has already passed.  Extensions must be requested before the deadline.  

If you successfully e-filed your federal return, you don't mail anything unless the instructions tell you to.  (There are some cases when a personal taxpayer might have to mail certain documents after e-filing.  I don't know about partnership returns.)  If you view or print the PDF of your tax return, the first page should be instructions from Turbotax that will tell you if you need to do anything else after e-filing.

The bad news is that the penalty is up to $195 per month per partner, so you are potentially on the hook for $780 in late fees.  The good news is that, if the IRS assesses a penalty (you would get two letters, one for each return), you can request an abatement for good cause, or an administrative waiver if this is the first time you ever owed a penalty.

https://www.irs.gov/payments/penalty-relief

[ChristoThomas]

Thank you - There is no mention of sending paper copies. I will wait for the penalty bill and definitely ask for relief. Thanks for sending IRS link.