My husband and I formed a LLC to hold our soon to be acquired rental properties. I am now in process of registering for a federal EIN. I put the number of members as 2 but the government website is saying that we will be classified as a partnership. Is this what I want? Since we are husband and wife, should we just register as a single member LLC? We are based in Tennessee if this makes a difference.
If your going to open a bank account in the LLC's name you will need a FEIN. If you are using the LLC to protect you in the event of a law suit from a tenant, or whoever, you need to transacting the business through a separate account or the plaintiff will be able to "pierce the corporate veil".
You want to be taxed as a partnership. With 2 members in the LLC, you simply cannot be an SM LLC for Federal income taxation purposes. The location of your business and or state of registration is irrelevant as Federal Income Taxation is uniform throughout the 50 states and (is supposed to be) in all U.S. Territories.
@Vincent Incopero Thanks for the link!
I am married but set up my LLC with only my name on the Company. My husband and I have always filed our taxes jointly....any suggestions on the best approach for us when filing 2016's tax return as I set up my LLC in 2016. I have not passed any income through my LLC or gotten a FEIN to date.
Should I get a FEIN before the end of 2016?
Should I open a business checking account before the end of 2016?
Should we file our taxes jointly in 2016?
These questions may be beyond the scope of what I should be asking on a forum and if so....I apologize.
You should seriously consider speaking with an accountant regarding tax specific matters, I am neither licensed to nor comfortable with providing tax advice.
The FEIN is a prerequisite to establishing a business account. Now that you are seemingly stating that you are the sole member of the LLC, requesting the FEIN as a SMLLC would be appropriate .
A business account is the proper way to hold and distribute company funds and remit payments to third parties to whom the company is responsible for paying .
Hope this helps . Again , I can't STRESS THE IMPORTANCE OF SPEAKING TO A LICENSED CPA regarding tax specific inquiries .
@Allison H. If your LLC is under your name only, then it is considered a sole proprietorship and can be reported on your 1040 (filed jointly with your husband). The moment you have 2 or more members in an LLC, you are required to file a separate return for your LLC.
In your case, you would file a 1040, jointly with your husband as you have done in the past, and include your LLC's revenues and expenses there.
You are required to have a FEIN if you decide to open a bank account, but you do not need a bank account if you can use Excel to keep track of income and expenses. I wouldn't worry about a bank account at this point if you are not receiving any income yet.
Hope this helps. Let me know if you have any other questions.
@Ana Garcia thanks for answering my questions.
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