Tax questions -Husband&Wife LLC


A

April

Husband and wife formed a LLC last year in CA. There is no
revenue, only expenses. At registrations, the box"more than
one member" was checked. There is a seperate bank account
for this business. Husband and wife file join tax returns.

1) Should this LLC treated as a single member since the
husband and wife are only memember of this llc and they file
join return for federal and state income tax purpose?
Therefore, only need to file 1040 and sch E?

2) If this is treated as partnership, what are the forms to
be filed? 1065 and sch K1? What other tax filings are
required in addition to 1040?

3) In California, is only C-corp required to file tax with
California Franchise Tax Board and pay annual 800$? LLC as
partnership no need to pay and file? Please confirm.

Any educated opions are highly appreciated.

April
 
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D

David Woods, EA, ChFC, CLU

April said:
Husband and wife formed a LLC last year in CA. There is no
revenue, only expenses. At registrations, the box"more than
one member" was checked. There is a seperate bank account
for this business. Husband and wife file join tax returns.

1) Should this LLC treated as a single member since the
husband and wife are only memember of this llc and they file
join return for federal and state income tax purpose?
Therefore, only need to file 1040 and sch E?
I'll buy that.
2) If this is treated as partnership, what are the forms to
be filed? 1065 and sch K1? What other tax filings are
required in addition to 1040?
No further forms needed.
3) In California, is only C-corp required to file tax with
California Franchise Tax Board and pay annual 800$? LLC as
partnership no need to pay and file? Please confirm.
Well you should still have the annual LLC registration fee,
partnership or not.
Any educated opions are highly appreciated.
And paid accordingly, no?
 
T

Thomas Healy

April said:
Husband and wife formed a LLC last year in CA. There is no
revenue, only expenses. At registrations, the box"more than
one member" was checked. There is a seperate bank account
for this business. Husband and wife file join tax returns.

1) Should this LLC treated as a single member since the
husband and wife are only memember of this llc and they file
join return for federal and state income tax purpose?
Therefore, only need to file 1040 and sch E?

2) If this is treated as partnership, what are the forms to
be filed? 1065 and sch K1? What other tax filings are
required in addition to 1040?

3) In California, is only C-corp required to file tax with
California Franchise Tax Board and pay annual 800$? LLC as
partnership no need to pay and file? Please confirm.

Any educated opions are highly appreciated.
I hope you aren't the "W." This is a partnership for income
tax purposes, and it files Form 1065. Te expenses are
probably "startup expenses." You can write off up to $5,000
of startup expenses once the business has "opened its
doors." I believe LLCs are subject to the $800 annual
franchise tax (Katie, can you confirm?). If you had to pay
$800 when you registered with the FTB, then for sure it's
liable.

Part of the preparation of the 1065 involves preparing the
K-1 that shows you what you put on Schedule E of your Form
1040. LLC taxation is complicated enough that I strongly
suggest you consult a local tax pro to assist you.
 
K

Katie

I hope you aren't the "W." This is a partnership for income
tax purposes, and it files Form 1065. Te expenses are
probably "startup expenses." You can write off up to $5,000
of startup expenses once the business has "opened its
doors." I believe LLCs are subject to the $800 annual
franchise tax (Katie, can you confirm?). If you had to pay
$800 when you registered with the FTB, then for sure it's
liable.
Sorry to be so slow responding to this. I was in Italy with
my family for two weeks.

Any LLC organized or doing business in CA (single or
multiple member) must file Form 568 and pay the $800 minimum
tax. If it has total income (basically gross receipts) over
$250,000, it must also pay the LLC fee.

Katie in San Diego

The foregoing is intended for educational purposes only and
does not constitute legal or professional advice.
 
T

Thomas Healy

Katie said:
Sorry to be so slow responding to this. I was in Italy with
my family for two weeks.
Must be nice to take time off in the middle of tax season
<grin>. Actually I always take a long weekend near the end
of February as a 7th inning stretch.
 
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G

guavaln

Must be nice to take time off in the middle of tax season
<grin>. Actually I always take a long weekend near the end
of February as a 7th inning stretch.
It's been about 20 years since I did any tax compliance
work. Just consulting, that's all I do! My phone rings a
little more often during the filing season, it's true. When
I was in public accounting I used to say that I could tell
when March 15 or April 15 was getting close because each
week the pitch of the staff voices on the telephone got a
little higher, and I saw a little more of the whites of
their eyes when they looked in my office door <G>. But
otherwise, filing season doesn't affect me.

Katie in San Diego
 
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