Hi, guys! I still need to file taxes for 2018. I also have a new LLC but did not make any money this year. I remember reading that I can simply complete my normal tax form and that will also count toward my single member run LLC. Is this true? Is there another form I need to include?

If this is a single-member LLC (you are the sole owner), then you will file the information for that LLC on your personal income tax return using Schedule C (Self-employed profit and loss).

To input your Schedule C LLC activity:

• Sign in to your account and click on the orange Take me to my return button (skip this step if you are already in your return)
• Click on Search at the top of the screen
• Input "schedule c" in the search box and hit enter
• The first link available should be Jump to schedule c - click on this link
• TurboTax will walk you through inputting your income, the business information, and expenses

Important: You do not report the draws you take from your self-employed business as separate income on your tax returns, nor do you deduct these amounts on your Schedule C. Your self-employment income for tax purposes will be the profits of the business (which may actually be more or less than the amounts you draw as compensation).

Note: A single-member LLC may make the election to be taxed as a corporation, which would require filing Form 1120 or 1120-S.

@Tim Ivory you haven't provided enough information to answer your question.

For instance what type of investing were you engaged in? 

I recommend that you hire a professional tax accountant. There are many of here on Bigger Pockets. Reach out to a few and find someone you like. 

Good luck, 

I filed using free file turbo tax but don't recall there being a schedule c form. Do I also need to send this for too? If it's unclear, should I send it anyway?

https://www.irs.gov/pub/irs-pdf/f1040sc.pdf

@Bill Hampton 

I used the code real estate (other). For the description, I simply used Real Estate Investing.

I made no money and spent no money under the LLC.

I filed a regular 1040 form and used a schedule C EZ form as an addendum mailed in. Is this okay? I used Turbo Tax, which also used the same schedule C EZ form, but used a different business which does not have an LLC. Because of this, I decided to also mail in an additional Schedule C EZ form which has my EIN number. Is this correct?

In essence, the 1040 form Turbo Tax sent online used "My Sound Design Business" as its business name.

However, I also have an LLC which I must file every year. That is why I'm planning on mailing an additional schedule c form. Is this good?

Ie, can there be multiple Schedule C EZ forms attached to a 1040 form? 

@Tim Ivory

If there were no items of revenue, expense, or credit for the LLC why are you filing a Schedule C? Especially if you're asserting the LLC is involved in "real estate investing"?

I don't know what else to label it as. I set it up so I can get hard money loans for fix and flips. The ones I've spoken with require an LLC.

I thought that because I have an LLC I need to file, however, it just now occured to me that I remember reading that if I didn't make 400 dollars, I don't need to file. Is this correct?

So, one can have an LLC, but only needs to file if one makes atleast 400 in profit? Is it a good idea to file anyway?

On another note, my turbo tax e file was rejected and I don't understand why!

1. I did not claim any dependents.

2. I'm 33 so no one can claim me as a dependent.

I don't understand how to fix this, ideas?

Description of error:
If Form 1040, 'PrimaryClaimAsDependentInd' is not checked, then the Primary SSN must not be the same as a Dependent SSN on another return.

What needs to be done:

This return was rejected by the IRS, because an exemption has been claimed for the taxpayer, but the taxpayer's SSN has already been entered as a dependent on another return. The taxpayer's SSN cannot be used to claim an exemption on two separate tax returns. Verify that the taxpayer's SSN has been entered correctly. If the Taxpayer's information is correct and you want to file electronically, the personal exemption cannot be claimed for the taxpayer on this return. If you wish to claim the personal exemption for the taxpayer on this return, you must print and file by mail.

If the LLC was dormant for 2018 you shouldn't be filing anything at the federal level. A SMLLC taxed as a disregarded entity doesn't automatically report on the Sch C is what I was getting at. It might be Sch B, C, D, E, or F depending on what exactly the SMLLC does.

You may still have an obligation at the state level for Tennessee's Franchise & Excise tax (and have the $100 minimum franchise tax liability).

Best of luck.  If this is strange territory or confusing I would consider interviewing a few CPAs/EAs going forward.

@Tim Ivory

"On another note, my turbo tax e file was rejected and I don't understand why!"

Call TurboTax to help get this resolved.  That's what you're paying them for.

I just recently paid 300 dollars for business tax. Is this what you were referring to?

I got a letter asking for payment or the LLC won't be valid anymore, so I paid it. This will be good news and one less thing to worry about, if so.

About the error, I'm stumped. The internet says to just mail the form in, so that is what I'll do! 

The irs will sort out the dependency status conflict themselves with the parties involved.

But, how is it possible for anyone at all to add my SSN as a dependent when I'm 33? Something weird is going on!

Originally posted by @Eamonn McElroy :

@Tim Ivory

"On another note, my turbo tax e file was rejected and I don't understand why!"

Call TurboTax to help get this resolved.  That's what you're paying them for.

 I wish I could! It's actually a free e-file so I'm not paying anything! The only solution I found was to just mail it in, so that's what I'll do.

@Tim Ivory ....dude.... you are ALL over the place on this.

E-Filing and then sending in an additional form is almost never a thing and you have GOT to slow down on this whole process.  You've jumped in with both feet and, I get it.... you're far from shore and you're just trying to do whatever it takes to end the process and get it finished.

But you're doing this at your own detriment and you should thank your lucky stars that your E-File was rejected because you're just mashing buttons at this point and you're about to get yourself in trouble.

Back up and just stop.

Here are some statements you've made.  

I've had no income and I don't have to file if I made less than $400.

Which is it?  You had no income or you had less than $400.  The $400 mark means nothing for filing or not.  That is the level at which you may or may not owe Self Employment taxes.  And that's profit, not income.

So.... if you had no income - zero, zilch, nada, nothing then it is HIGHLY likely that you are not "in business". 

Whether or not you are "in business" depends on a whole host of factors such as the level of activity and effort you are putting in to get this thing off the ground. Are you advertising? Are you building relationships with potential customers, vendors, lenders, etc? Do you work at this every day and is it your sole effort activity? Or do you have another job and this is something you kinda maybe though about sorta doing as a side hustle, but you don't really work it much and you don't have anything to show for it except a pile of business cards and an idle LLC.

So let's say you're "in business" and you have some expenses to write off.  First of all, kiss your free E-File goodbye.  This is also not the first time you will open up your wallet to pay for services.  That's what being a business and being a professional is all about.  Trying to manipulate your tax return so you can still qualify for the free E-file doesn't serve you at all and it's why you ended up in a situation where you're mailing in a document that the IRS will likely just shred.  Trust me on this - there is no IRS person just sitting around, looking at loose schedules and then scanning them in somewhere and adding them to your E-File.

Sorry - got derailed.

So if you're in business, then you fill out the Schedule C (assuming you're a single member LLC, not a mulit-member LLC) appropriately listing your legitimate business income and deductions.

If you're not in business, then there's nothing to file, so delete the Schedule C from your file and move on with your life.

But all y'all gotta stop half assing your taxes when you start investing.  You end up screwing yourselves over so bad and there are tax professionals out there that will charge you an absolute boatload of money to get it fixed.

There are an equal number of professionals who will help you file correctly for something way less than a boatload.

I have seen SO many F'd up tax returns this year that were completed with TurboTax or by "tax preparers" at Block or Liberty or taxshopinthestripmall and it's just really frustrating to watch people do their taxes with a shotgun.

Do it right or don't do it at all.

/rant

Agree with @Linda Weygant .  You're about to mail in a return without grasping what's in it or if it's even correct.

Now..based on what you've laid out, someone has claimed you as a dependent on their tax return, either due to misunderstanding or fraud.  There is no cutoff age for dependents and the fact that you're 33 doesn't matter.  Google "qualifying relative" and do some reading.  You need to call the IRS.

"I just recently paid 300 dollars for business tax. Is this what you were referring to?"

The $300 is an annual filing fee with the TN SoS.  I am referring to a tax filing obligation that you may have with the TN DOR.  Google TN Form FAE 170 and TN Form FAE 183.  Do some reading.

Again, if this is too much for you enlist the help of a CPA or EA.

I have a sound design business which I'm filing for 2018, which I thought I might need to also included a schedule C for the LLC I set up.

I set up an LLC for fix and flips that I'll need soon for a hard money loan.

I originally intended to jump in the the rehab business, but decided to go after a different strategy, which involves a lot of prospecting and sales. It's a real skill that takes time to learn! I've decided to stay away from loans to build income using lease options, without capital, hence the idle LLC!

The e-file didn't go through so I'm simply mailing it in. I'm not filing a schedule C for the LLC since I didn't make any income at all.

Not sure what else to say, except I'm trying not to half *** anything. I'm doing the best I can! People do file there own taxes, right? 

Will respond more when I have more time, but, I'm simply following the instructions on the taxturbo site. It says to try to delete the dependents on the troubleshoot, but, there are none listed.

The other option it says is to simply mail the form in, which is what I might do. I'll see if any CPA can see me nearby, but this seems straightforward enough. I want to be careful so I'll take your guys advice and spend more time on this. I'll call the IRS and see what the problem is. if it sounds like I need a CPA, I'll do it without hesitation!

Cheers

These are the forms that are included.

1. 1040
2. Schedule 1
3. Schedule 4
4. Schedule C-EZ
5. Schedule SE

I use paypal for just about everything so all income and expenses are accounted for.

For the most part, everything seems straightforward enough, mathwise, simple addition and subtraction with some multiplication here and there. The only thing I'm unclear of at this point is the dependency error so I'll give them a call tomorrow and see what its all about and try to clear it up. Then I'll go ahead and file the tax return myself and send in a check along with it. 

Would a CPA review paperwork before I send it in? I'd feel better having a second set of eyes on it. I can share what I have in pdf form, but I'll block out my SSN. Just let me know what fees beforhand.

Cheers!

@Tim Ivory

A CPA who reviews a return that is not submitted will have to sign the return. I don't think a CPA will want to sign the return unless they are compensated correctly and able to fully review the return.

@Basit Siddiqi I see. Thank you!

Would it be easier to have the CPA that reviews it also submit it?

@Eamonn McElroy Thanks for your specific guidance. You are right. I need to pay a minimum of $100 franchise and excise tax via FAE 170, regardless of inactivity. Thank you!! 

I'm confused on FAE 183 though, what is this?  FAE 183 - Application for Exemption/Annual Exemption Renewal. Do I fill this out to avoid the minimum franchise tax?

Seems clear that I won't need to file a SCH-C at the fed level:

When an LLC only has one member, the Internal Revenue Service (IRS) will automatically ignore it regarding federal tax liability. This is because the LLC member's expenses and income will appear on their individual tax return. When an LLC has two or more members, the IRS will automatically treat it as a partnership. Therefore, the LLC will file an informational return to report their income, gains, losses, deductions, credits, etc.

Filing for Disregarded Entities

When they're not treated a separate entity, LLCs are taxed similar to sole proprietorships. In other words, their expenses and income are filed on Schedule C of their members' personal tax returns. Schedule Cs must be filed for all LLCs that generate income of more than $400 annually.

A single-member LLC, without any expenses to deduct and no business activity, is not required to file the LLC's income on Schedule C. Remember, the member will need to file an individual tax return, and may need to complete a Schedule C for self-employment income.

Okay, seems filing a FAE180 has more steps involved that I thought. It must be filed electronically on TNTAP.

I needed to first register for the franchise and excise tax, which can take 1-2 days. Once I have created and have access to this account, I can file online and pay the minimum $100 FAE tax.

So, have two things to do tomorrow: call the IRS and TNTAP to make sure I'm doing things correctly.

Solved the issue with dependency and filed :) All is good on this front.

Only the FAE remains :)

Thanks again to everyone for there very helpful advice (and rants). It's much appreciated!

Originally posted by @Tim Ivory :

I have a sound design business which I'm filing for 2018, which I thought I might need to also included a schedule C for the LLC I set up.

I set up an LLC for fix and flips that I'll need soon for a hard money loan.

I originally intended to jump in the the rehab business, but decided to go after a different strategy, which involves a lot of prospecting and sales. It's a real skill that takes time to learn! I've decided to stay away from loans to build income using lease options, without capital, hence the idle LLC!

The e-file didn't go through so I'm simply mailing it in. I'm not filing a schedule C for the LLC since I didn't make any income at all.

Not sure what else to say, except I'm trying not to half *** anything. I'm doing the best I can! People do file there own taxes, right? 

Guess what else is a real skill that takes time to learn? Tax accounting. My advice is hire a professional. Based on your questions, this is outside your core competency. That is not a dig at you. Most accountants hire people to fix their cars or remodel their home, because it is outside their core skill set.

There should be two sets of eyes reviewing your taxes, but the CPA should be the first set. Then you step through everything they do, before you sign and send in. CPA is tax deductible and they will actually save you money, because they will find things you did not think of. Also they sign the form, so in the event you get audited, they stand with you to help you through the audit.

Nothing wrong with taking short cuts or hacks in life, but taxes is not the place to do it. 

If you do decide to do your taxes next year, do them in February. That will take the deadline pressure off and give you time to work through issues.

Again, nothing against you. On the surface taxes are not difficult, but every time I say that, I learn something new.

@Joe Splitrock

Believe me, Joe, I did not mean to step on any toes either. I have a lot of respect for those with a knack for accounting (and law for that matter). I'm not one of them. Nothing comes easy, especially nothing worthwhile! My point was, with fix and flipping, results, either positive are negative come aptly, unlike prospecting which yields results much later after the skill is acquired. I was quite literally a hair away from my first LO deal but I hesitated taking the offer because the seller wanted to essentially split the LO fee. In hindsight, doing it for free to gain the experience would have been well worth it even. Live and learn :) 

On that note, if I even made even a penny in real estate I'd not only hire a CPA, but actively look for an awesome one who knows real estate. I love talking to people in general about these things and enjoy the conversations a great deal. I'm just not at that point where I feel my efforts, time and money, are well spent seeking these relationships when I haven't made any income yet! Forgive my lack of enthusiasm, but I think Linda said it quite well, I've dipped my feet in and want to get out as soon as possible and get it over with so I can focus on more important things, imo. I've been as careful and accurate as possible so let the chips fall where they may, moving forward or learning from any mistakes.