How to file tax if there is no business activity

Question

We set up an LLC in Q4 2023, so there was no business activity last year. How should I file federal and state (North Carolina) tax return?

Yi Chu · Answer

Thank you @Sean O'Keefe and @Michael Plaks.

The LLC was under my wife's name only. She will file the annual report with NC.

Michael Plaks · Answer

@Yi Chu

I assume that you created a husband-wife LLC. Since North Carolina is not one of the community property states, you will have to file a partnership tax return for this LLC once it starts its business activity. Two tax returns actually: one for the IRS and another one for NC.

However, it there was no business activity, you most likely do not need to file anything for 2023.

I'm saying "most likely" because there could be some important details we're overlooking here.

In order to keep its good standing with NC, your LLC needs to file an annual report with NC and pay an annual fee. https://www.sosnc.gov/divisions/business_registration/annual...

Sean O'Keefe · Answer

@Yi Chu this is a great question:

• First, determine if you need to file. If this is a Single Member LLC, disregarded by the IRS, you likely don’t need to file a Federal tax return.
• Even if you aren’t required to file a Federal tax return for your LLC, you may still need to file a State tax return for each of the States you own a rental property in or are operating in.
• Business activity or value of rental income could impact the requirement to file depending on the State so helpful to keep this in mind when you do your research
• The LLC tax filing deadline is 1 month earlier than Personal taxes. If you are required to file get it in by 3/15 or file an extension.
• LLC failure to file penalties, if you are required to file, are expensive so make sure to file on time or file an extension.

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*This post does not create a CPA-client relationship.  The information contained in this post is not to be relied upon.  Readers are advised to seek professional advice.