LLC & S Corp


V

Vijay Sharma

For a LLC elected to be a taxed as a Partnership, is the
books (financial accounting) done like a Partnership or like
an S Corp or a different way?

As far as income tax is concerned, do LLCs and S Corps have
special California (State) tax filing requirements, i.e.
special tax forms to be prepared for LLC or S Corp or at a
personal level for such shareholders?

Thanks in advance for any input.
 
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H

hnsl

Vijay said:
For a LLC elected to be a taxed as a Partnership, is the
books (financial accounting) done like a Partnership or like
an S Corp or a different way?

As far as income tax is concerned, do LLCs and S Corps have
special California (State) tax filing requirements, i.e.
special tax forms to be prepared for LLC or S Corp or at a
personal level for such shareholders?

Thanks in advance for any input.
For the books of the LLC, I simply substitute the word
"member" vice "partner".

ChEAr$,
Harlan Lunsford, EA n LA
Sun July 30, 2006
 
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K

Katie

Vijay said:
For a LLC elected to be a taxed as a Partnership, is the
books (financial accounting) done like a Partnership or like
an S Corp or a different way?
Like a partnership would be the simplest way -- minimal
adjustments to make for tax purposes.
As far as income tax is concerned, do LLCs and S Corps have
special California (State) tax filing requirements, i.e.
special tax forms to be prepared for LLC or S Corp or at a
personal level for such shareholders?
An LLC (single or multiple member) files California Form 568
and pays the $800 minimum tax and the fee (which is zero
unless it the LLC's total income is more than $250,000). A
multiple member LLC completes Schedule K and K-1's for all
the members. An individual member of a multiple member LLC
reports the information from his or her K-1 on Schedule E of
the 1040 and shows any necessary California adjustments
(differences between the federal and California K-1's) on
Form 540, Schedule CA. A single member reports the income
and expenses of the LLC on Schedule C for both California
and federal purposes.

An S corporation files California Form 100S and pays the
corporate franchise tax on its California taxable income at
a reduced rate of 1.5%, but not less than the $800 minimum.
Each stockholder gets a K-1 and reports the income from it
on federal Schedule E and makes the California adjustments
on the 540-CA if necessary. A stockholder who provides
services to the corporation receives a salary which is
reported by the corporation on a W-2 and reported by the
stockholder as wage income.

Katie in San Diego
 
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V

Vijay Sharma

Thanks to both of you for replying. A follow up question -

For a single member LLC, Federal does not require any tax
filings for the business (Schedule C at the personal member
level) but California requires Form 568. Is this correct?
 
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S

Stuart A. Bronstein

Vijay Sharma said:
For a single member LLC, Federal does not require any tax
filings for the business (Schedule C at the personal member
level) but California requires Form 568. Is this correct?
LLC's aren't recognized for federal tax purposes. So you
treat it as the entity it is being taxed as.

Stu
 
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K

Katie

Vijay said:
Thanks to both of you for replying. A follow up question -

For a single member LLC, Federal does not require any tax
filings for the business (Schedule C at the personal member
level) but California requires Form 568. Is this correct?
That's right. You still report the income and expenses of
the SMLLC on Schedule C for California, but you file the 568
to cover the minimum tax and fee.

Katie in San Diego
 
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