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?
@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
Point well taken and is one I feel I should ponder a bit more. Focus on my strengths I already have and build momentum and traction to get this train running. I really do like the idea of building capital without loans and less risk so I decided to develop my sales skills with cold calling prospects. I don't have to worry about loans, partnerships, finding other investors money, realtors, lenders, risking my credit, etc, while I build capital. It's a great idea but it takes time to learn. I want to give it a few more months to see what happens.
My plan is building capital with LO (without loans) until I earn enough to get conventional loans after 2 years of solid investing income and use the funds I've made with LO as downpayments for loans for rehabs. Build more capital, then when I have so much money I NEED to spend it somehow someway, I'll be going straight for buy and hold and BRRR's till the cows come home, until finally getting into new construction and commercial opportunities. This income isn't an ends but also a means to even something larger outside of the real estate sector. So plans within plans, dreams within dreams.
Yea...I get it.
When I was about 20, my brother and I had a lawn mowing business. We waited until April 14th to start our taxes the first year - how hard can it be right? Yea, it was a partnership too, and the folks who have a clue are laughing at the dates on that score too.
Well, we ended up not doing them right that year, I can tell you that much.
So the next year we wised up a bit and got started early. This publication, that publication, going in circles - it's maddening really. But we dug in and got it done. At the beginning of each publication it will state how many hours the average person will need to research and complete the forms correctly. I've found the estimates to be about right. Sometimes it's 40 hours. Wait what?
I have been soooo happy throughout the years to have done that. My taxes have always been simple, and for me, there was zero reason to pay for a CPA. Once I learned it for the first time, it's been easy to reference the prior year and keep abreast of changes.
However, as things get more complicated, a CPA is going to be my best friend. Good thing I have a bit of tax knowledge myself, so I can smell out the good vs the bad. IMO, a CPA ought to be able to do the taxes on paper and not just say, "I dunno...I just enter it into the computer and it tells me what to do". I want a CPA that can offer strategy, not simply complete data entry. But, I suppose the programs do get more sophisticated every day too.
Because my state forces me to file electronically for my partnership, I have been forced to use a program. I can say this, it's a damn good thing I know what I am doing, or I would be entirely lost with the program. I have the feeling you have been going through the same thing...I dunno...never used Turbo.
So to answer some of your questions, and no I am not a CPA, you need to file a separate Schedule C for each business you own. If you have ownership in a partnership, the partnership must file their own business return as a separate entity from you, and then send it's members a statement for their personal taxes. Partnerships need to file their return by March 15th. Also in many states, you will need to file a partnership return with the state as well.
You are getting confused between what an LLC means to different parties. The IRS does not recognize the LLC as a taxable entity, but they do sometimes still ask you to define if you operate as one. An LLC is something that the state recognizes, and each state has it's own rules.
My advice to you for starters, is keep extremely accurate records of every penny in and every penny out, for all businesses you own. The IRS is not going to let you slide when your phone crashes and you lose your receipts so, give that a think on how you want to handle that. I have a hybrid system of sorts, an extremely simple one, where I enter all my data into a simple excel spreadsheet, but have paper backups for all receipts, and print out a statement from excel every so often. I learned the hard way and had to go back and recreate 3 years of books when the digital world failed me. Darn good thing I never threw out a single paper receipt.
Good luck and happy researching.