single member LLC


C

Cookie

I have just formed a single member LLC. I have no
employees, and donot expect to have any in the near future.
I went to get an EIN from the SS-4 form,but the instructions
say I do not need an EIN for the LLC, and that when i file
for taxes, I need to use the Sch C and file as if I am a
sole propreitor, how does that work. I already have an
Business banck account setup in the name of an LLC, and have
funds deposited into the account.

How does it work when i do taxes for My Single member LLC
with no employees?

Thanks,
Sam
 
Ad

Advertisements

P

Paul A Thomas

Cookie said:
I have just formed a single member LLC. I have no
employees, and donot expect to have any in the near future.
I went to get an EIN from the SS-4 form,but the instructions
say I do not need an EIN for the LLC, and that when i file
for taxes, I need to use the Sch C and file as if I am a
sole propreitor, how does that work. I already have an
Business banck account setup in the name of an LLC, and have
funds deposited into the account.

How does it work when i do taxes for My Single member LLC
with no employees?
Even if you had employees, you use Schedule C.
 
B

Bryan Kellar

Cookie said:
I have just formed a single member LLC. I have no
employees, and donot expect to have any in the near future.
I went to get an EIN from the SS-4 form,but the instructions
say I do not need an EIN for the LLC, and that when i file
for taxes, I need to use the Sch C and file as if I am a
sole propreitor, how does that work. I already have an
Business banck account setup in the name of an LLC, and have
funds deposited into the account.
For legal purposes, you are going to keep a seperate bank
account, seperate books, and so on for your LLC. You could
run iinto trouble down the road if you don't treat it as a
seperate entity.
How does it work when i do taxes for My Single member LLC
with no employees?
As the sole owner of an LLC, you will report all of that
seperate business income and expenses on a Schedule C, and
file that with your 1040. For tax purposes, your LLC is
taxed as if the income were all yours.

To take it one step further, if you had two 50-50 owners of
the LLC, you would be taxed as if you were a 50-50
partnership. Then only half the income would be taxed on
your tax return.

Bryan
 
T

Thomas Healy

Cookie said:
I have just formed a single member LLC. I have no
employees, and donot expect to have any in the near future.
I went to get an EIN from the SS-4 form,but the instructions
say I do not need an EIN for the LLC, and that when i file
for taxes, I need to use the Sch C and file as if I am a
sole propreitor, how does that work. I already have an
Business banck account setup in the name of an LLC, and have
funds deposited into the account.

How does it work when i do taxes for My Single member LLC
with no employees?
Use Schedule C, along with Schedule SE. There could also be
other forms you will need.
 
H

Harlan Lunsford

Cookie said:
I have just formed a single member LLC. I have no
employees, and donot expect to have any in the near future.
I went to get an EIN from the SS-4 form,but the instructions
say I do not need an EIN for the LLC, and that when i file
for taxes, I need to use the Sch C and file as if I am a
sole propreitor, how does that work. I already have an
Business banck account setup in the name of an LLC, and have
funds deposited into the account.

How does it work when i do taxes for My Single member LLC
with no employees?
You'll use a schedule c AND se with your 1040 form.

HOWsomeever.... Best to get an EIN anyway, since people you
do business with and who have to give you a 1099-misc might
insist.

An EIN doesn't cost anything btw.

ChEAr$,
Harlan Lunsford, EA n LA
Wed 23 Feb 2005
 
D

David Woods, EA, ChFC, CLU

Cookie said:
I have just formed a single member LLC. I have no
employees, and donot expect to have any in the near future.
I went to get an EIN from the SS-4 form,but the instructions
say I do not need an EIN for the LLC, and that when i file
for taxes, I need to use the Sch C and file as if I am a
sole propreitor, how does that work. I already have an
Business banck account setup in the name of an LLC, and have
funds deposited into the account.

How does it work when i do taxes for My Single member LLC
with no employees?
The same as for a single member LLC with employees. On
Schedule C.
 
Ad

Advertisements

J

JMc

I have just formed a single member LLC. I have no
employees, and donot expect to have any in the near future.
I went to get an EIN from the SS-4 form,but the instructions
say I do not need an EIN for the LLC, and that when i file
for taxes, I need to use the Sch C and file as if I am a
sole propreitor, how does that work. I already have an
Business banck account setup in the name of an LLC, and have
funds deposited into the account.

How does it work when i do taxes for My Single member LLC
with no employees?
The SMLLC will file schedule C for federal. The SMLLC is a
disregarded entity for federal tax purposes.

I'm not sure what state you are in, but most likely you
would file the state's equivalent of schedule C, and may
also be subject to a corporate-level tax.

Take, for example, PA. You would file PA schedule C for the
SMLLC on your personal return and also file the RCT-101 for
the capital stock tax.
 
P

Peter C. Gatto, CPA

Cookie said:
I have just formed a single member LLC. I have no
employees, and donot expect to have any in the near future.
I went to get an EIN from the SS-4 form,but the instructions
say I do not need an EIN for the LLC, and that when i file
for taxes, I need to use the Sch C and file as if I am a
sole propreitor, how does that work. I already have an
Business banck account setup in the name of an LLC, and have
funds deposited into the account.

How does it work when i do taxes for My Single member LLC
with no employees?
Sam:

Assuming you did not "check-the-box" to treat the SMLLC as a
corporation, you will indeed use Schedule C of Form 1040 to
report the LLC's activity for federal purposes (definitely)
and for state purposes (probably). This is regardless of
whether you do ever hire employees or not. If you do, you
will have payroll tax forms to file for federal and
(probably for) state tax purposes.

If the LLC was formed in CA or if the LLC has activity in CA
(other than certain "protected" sales activity), then you
will need to file Form 568 with the CA Franchise Tax Board.
There is an $800 annual tax (always) and an annual gross
receipts fee (once you pass a minimum threshold of receipts
(I think over $250,000).

If the LLC was formed in a different state and / or will
have activity in different states, you will need to check
with the applicable tax authorities to see what tax
reporting / filing requirements the LLC has.

As for the EIN, just because you do not *need* a separate
number for the LLC does not mean you should not *have* a
separate EIN for the LLC. For now, your SSN will be used
and if you ever want the LLC to borrow money from a bank,
the bank will probably want you to guarantee the loan (and
you'll need to supply your SSN.) However, what if the LLC
gets big enough and profitable enough to no longer need you
as a guarantor? Do you still want to be handing out your
SSN all of the time? I would talk to the attorney who set
up the LLC and discuss the issue with her / him.

Also (and here's where it may seem that I am getting
*testy*, but I am really more *curious*), why did you set up
the LLC? Normally I would assume for tax reasons and for
liability reasons. However, I have to assume that tax
reasons were not the reason because clearly you have not
thought about taxes until after the fact of the LLC's
formation (otherwise you would know the basics of at least
how to report the LLC's activity to the IRS and the
applicable state). This is a conversation that should have
taken place with an EA (enrolled agent) or CPA before you
set up the LLC.

If for liability reasons, in what business are you? Many
times the LLC offers no protection at all because you
personally are performing the services (if a service
business); therefore, you personally are legally liable.
Again, this is a discussion that should have occurred, and
hopefully did occur, before you had the LLC formed.

Thus, if legal liability is the only reason you had it set
up, and if you will in fact not have any protection afforded
by the LLC, then you have given yourself administrative
tasks that are unnecessary and that will take time away from
what you should be doing; i.e., making money!

Egad I am long-winded!!!

Regards,

Peter C. Gatto, CPA
 
T

Thomas Healy

Peter C. Gatto said:
If for liability reasons, in what business are you? Many
times the LLC offers no protection at all because you
personally are performing the services (if a service
business); therefore, you personally are legally liable.
Again, this is a discussion that should have occurred, and
hopefully did occur, before you had the LLC formed.

Thus, if legal liability is the only reason you had it set
up, and if you will in fact not have any protection afforded
by the LLC, then you have given yourself administrative
tasks that are unnecessary and that will take time away from
what you should be doing; i.e., making money!
I think that the LLC is the Entity-du-jour. So people think,
"Cool!" and sign up for one without really thinking it
through. Here in Colorado it costs only $0.99 per year to
maintain an LLC (at least until the Secretary of State ends
its e-registration sale), and even the regular price of $10
is a bargain.
 
Ad

Advertisements

S

Stuart A. Bronstein

Peter C. Gatto said:
If for liability reasons, in what business are you? Many
times the LLC offers no protection at all because you
personally are performing the services (if a service
business); therefore, you personally are legally liable.
That's true of tort (e.g. personal injury) liability, but
not generally contract liability. On the other hand, larger
creditors will want the owner of the LLC to sign a personal
guarantee anyway.

Stu
 

Ask a Question

Want to reply to this thread or ask your own question?

You'll need to choose a username for the site, which only take a couple of moments. After that, you can post your question and our members will help you out.

Ask a Question

Top