Tax forms for two LLCs

Forum|Forum|3 years ago
June 28, 2023
6 replies
83 views

Hello! If I am an owner of TWO single-member LLCs, do I need to file TWO separate Schedule C forms and ONE combined Schedule 1 Form 1040 and ONE combined Schedule SE (1040 form)?

Thanks!

Ask the Experts - Energy - June 2023

Kelly Thomas C

Level 5

Even though the two single member LLCs are disregarded entities, if each has revenue and expenses, it would be best to report them separately on a Schedule C. If one had no income and no expenses, there is no need to file a Schedule C on that one.

I hope this is helpful.

Good luck on both LLCs!!

Kelly C,

CPA

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cmallow17Author

Level 3

Thank you @Kelly Thomas C and @Opus 17 ! 🙂

Opus 17

Level 15

@cmallow17 wrote:

Thank you @Kelly Thomas C and @Opus 17 ! 🙂

I will note that, because you formed 2 LLCs, you must keep them separate. If you had not formed LLCs, you would file based on the type of business and the nature of the expenses and income.

For example, suppose you drive ride share on weekends, and do landscaping during the week. You would generally file that as two separate schedule C businesses because the work, the income, and the kinds of expenses are so different. If you drove for Uber and Lyft, you could generally combine them as one schedule C for "ride share" because it's' the same work for 2 different vendors. However, if you decided to form 2 separate LLCs for your Uber and Lyft activities, you have to report them separately.

hope that clarifies.

Opus 17

Level 15

Yes. You need to keep the business activities separate, so that requires separate reporting of the income and expenses of each business. In the end, as you indicate, the net profits will flow to one schedule SE and your personal from 1040 (which will also have non-business deductions, credits and dependents).

Ruth C-L

Level 5

If you have multiple unrelated businesses organized as sole proprietorships/single member LLCs, you generally should prepare separate Schedule C forms for each to report your business income or losses. Separate Schedule C forms are typically filed for each spouse that has their own business as well.

The results of the various businesses are combined on your Form 1040 and added to your other income in determining your taxable income. In addition to paying income tax on your business, you will also need to pay self-employment taxes including Social Security and Medicare taxes. These taxes are calculated using Schedule SE with your Form 1040 tax return. If you have multiple sole proprietorship businesses, you combine the results of these into a single amount that you then use with your Schedule SE and flow through to your Form 1040. As with the Schedule C, if spouses have separate businesses, each spouse will prepare their own Schedule SE since self-employment taxes are calculated separately for each worker.

Ruth C-L, CPA, Atty.

Holly W

Level 5

Hello @cmallow17

We're so happy you could participate today!

The short answer: If the TWO businesses are unrelated, then you will fill out Two Schedule C's, they will both flow to ONE Schedule 1, and both business are combined on the Schedule SE FORM.

Here is the more detailed answer 🙂 https://turbotax.intuit.com/tax-tips/small-business-taxes/i-own-several-businesses-how-should-i-file-taxes/L5yGDsg6u

If your business is organized as a sole proprietorship for taxes, you report all business income or losses on your individual income tax return. The business income or loss that you earn isn't taxed separately from your other income. This income “passes-through” to your personal income tax return because the business profits don’t get taxed as a separate entity.

Most often, you report your business income and expenses on Schedule C of Form 1040. If you have multiple unrelated businesses organized as sole proprietorships, you generally should prepare separate Schedule C forms for each to report your business income or losses. Separate Schedule C forms are typically filed for each spouse that has their own business as well.

The results of the various businesses are combined on your Form 1040 and added to your other income in determining your taxable income. In addition to paying income tax on your sole proprietorship business, you will also need to pay self-employment taxes including Social Security and Medicare taxes. These taxes are calculated using Schedule SE with your Form 1040 tax return. If you have multiple sole proprietorship businesses, you typically combine the results of these into a single amount that you then use with your Schedule SE. As with the Schedule C, if spouses have separate sole-proprietorship businesses, each spouse will prepare their own Schedule SE since self-employment taxes are calculated separately for each worker.

Thank you so much for joining us today!

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