Today TaxMama hears from Mike in the Tax Parlor who tells us “My wife and I formed an LLC and began doing business last January. We are a home-based craft business and have done all our business under my SSN not a Tax ID #. Can we file our expenses/income for the business under our personal tax return? Or do we have to file a separate return. If so, what is that?”
Why did you form an LLC if you didn’t plan to use the tax ID number.
It’s an actual entity. It needs it’s own bank account. You should be using it.
This year, you didn’t do business as an LLC. So report everything on your own Schedule C.
On a separate Schedule C in your tax return, report -0- under the tax id number of the LLC.
Next, go open a bank account.
Then, sit down with a good local tax pro to do some planning for 2007. NOW.
That will help you decide just how to structure your LLC, as a corporation, partnership, or as a disregarded entity which reports its income on a Schedule C in your return.
There are lots of interesting planning things you can do with an LLC.
Handled properly, you could structure your business to dramatically cut your taxes.
With no planning? You’ll end up paying a fortune in self-employment taxes and won’t have proper benefits or retirement accounts.
It’s all up to you! Do something smart!
And remember, you’ll find answers to lots of questions about LLCs and other tax information, free. Where? At TaxMama.com[Note: If you were subscribed to the e-mailed TaxQuips, you’d be getting other exciting news and tips. Please click on the subscribe link and join us.]
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