Anyone DIY their LLC tax forms? What software do you use?

23 Replies

After many years of doing my own taxes with forms A, C & E using Turbotax we started using an accountant when we formed an LLC like 5 years ago for our properties. Now he's MIA, and we weren't all that thrilled with him anyhow for what it cost. Anybody use the corporate grade of tax prep software? Is it any harder than what I was doing with Turbotax?


I think TT has software, but I figured why not ask if there's anything better. Or is this a dumb idea for some reason? Our LLC returns seemed confusing, but that may have just been him giving us a lot of the worksheet nonsense to make it seem more complex than it really is.

@Johann Jells

Thought I’d chime in. I do my own returns, but I just use Excel. I sum my expenses by the categories on SchC and SchE. Yeah, the passive allowed loss part for the rentals is a bit more complicated for the average person, but as an engineer it’s not that hard for me to setup. When tax time comes, I download the pdf’s from the irs website and plug ‘n chug.

How are you doing your bookkeeping now? Sounds like you have a mix of rentals, flips, and whatever else going on.

From what I gather from other posts here on bp and friends, you are going to want to use Quickbooks for your bookkeeping/accounting, then TurboTax for tax filing. QB will export the directly data to TT. So, they are tag team software pkg (albeit from two different companies).

I hope my two cents helps. Good luck.

@Johann Jells

You are asking for a corporate grade of tax prep software?
What do you mean by this?

You are asking about the software that tax accountant's use to file your return?
Or are you asking about a retail tax software that can handle your tax return?
Turbo tax likely has a software where they call it pro/premium/plus that allows for schedule E filing.

The concern for you is that you had an accountant filing your tax returns for the past 5 years. There is information from these returns that you need to "carry over" to your current year return. Items such as accumulated depreciation and any potential suspended losses.
Would you feel comfortable doing this or would you prefer to hire an accountant?

@Basit Siddiqi You seem to have skimmed my post too fast. Obviously I know about TT doing schedule E, as a I said I have been using it for years, and just as obviously if I've been doing that I know about the depreciation schedules. When I said "corporate grade" I simply meant capable of creating a return for a corporation, which as you must know involves much more than just a schedule E.

@Johann Jells

Actually, I didn't understand that part of your request for "corporate" taxes either. It doesn't make sense since for a "normal" LLC, you either do a partnership return if you have multiple members or just a regular personal return if just one person. Either way, you will be filing forms A C E as you have been doing. The extra partnership filing spits out a k-1 which is the input to your regular 1040 filing.

Perhaps if you told us what is your LLC filing status? LLC can elect to be taxed as a S Corp or C Corp.

You’ve seen your actual returns for the past five years, right?  You have copies of the forms, right?   what aspect or which forms are confusing?

@David M. good question, I didn't mention that we've been filing as an S corp. It appears that may not have been the best structuring, but as I said I don't believe I've gotten the best advice from my accountant, who actually just popped up. A month without acknowledgement of receiving our tax data and on the very day I tell him we're through he says he mailed the LLC return draft to us that day. Still no sign of personal returns.

As for forms, it may be I just need to go slowly through to separate the key forms from the "noise". I know how to do that on a personal, but this I haven't done to that 1/4" of papers.

Originally posted by @Dan Schwartz :

Check out H&R Block’s Premium and Business Tax Software.  You can file 1165s, 1120Ss, etc.

Thanks Dan. Any idea if there's any difference between it and the TT product?  For $89 it seems like a steal, and it appears to do 1040s too, unlike the TT business version where I'd have to buy an additional personal version. Considering this guy just charged me $1000 for just the S-corp filings, and he give zero added value of advice, I need to do this next year. Trying to stiff him for this year's nonsense seems unwise at this point.

@Johann Jells I haven’t compared it with the TT product.  I’m not crazy about how it manages fixed assets, as I feel I really need to force to do things I’ve set up, like 30-year amortization of loan costs rather than including them in the basis of the property, etc.  If you can navigate the entity tax forms, you can use the software.  And yes, it is surprisingly inexpensive. 

Originally posted by @Johann Jells :

@Basit Siddiqi You seem to have skimmed my post too fast. Obviously I know about TT doing schedule E, as a I said I have been using it for years, and just as obviously if I've been doing that I know about the depreciation schedules. When I said "corporate grade" I simply meant capable of creating a return for a corporation, which as you must know involves much more than just a schedule E.

I tried to be helpful - anyway good luck.

 

Originally posted by @Dan Schwartz :

@Johann Jells I haven’t compared it with the TT product.  I’m not crazy about how it manages fixed assets, as I feel I really need to force to do things I’ve set up, like 30-year amortization of loan costs rather than including them in the basis of the property, etc.  If you can navigate the entity tax forms, you can use the software.  And yes, it is surprisingly inexpensive. 

Thanks.  I have a friend who was recently retired by Covid from a stint as an H&R location manager, I'll ask him what he thinks of the software. I guess at this point I have 6 month before starting in on this again. Unless the CPA ghosts me again on the 2019 returns.

 

I have been using H&R for a few years now.

While the personal return software is user friendly, the business one is kind of convoluted. If you know what you need to file, you can enter what you need. But I don’t like the way you have to fill it out. Also while you can efile returns for free in most versions, they want to charge you extra to efile the extension. Also you can’t efile 1099.

Also, don’t buy it directly on their website, wait for the many discounts that are popping up online around the end of the year. On average, I have been paying less than $50 for the full business premium version, or whatever name it was sold under that year, including free state filing.

If you're already in the TT world, no reason to switch to H&R.  Lots of unnecessary data entry. 

I file my own 1065s and 1120S. But my s-corp owns nothing. The TT software is annoying on the 1065 for me because it tries to make me do the Sch L & M even though I purposely hold assets below the 1 or 2 M min in each to avoid them.   

if your LLC is single-member or just you and your spouse in a community property state, a sch e may suffice.

@Johann Jells what is in your S corp? Just a mgmt company or do any assets sit in it? You’ll also need a payroll service for your S corp wages. Payroll can be done by hand but the self service payrolls are real cheap now!

Originally posted by @Greg O'Brien :

@Johann Jells what is in your S corp? Just a mgmt company or do any assets sit in it? You’ll also need a payroll service for your S corp wages. Payroll can be done by hand but the self service payrolls are real cheap now!

We have our rental properties in the S corp, but no employee wages paid. We've not even been taking disbursement, just letting cash pile up since we formed it waiting for a buying opportunity. I really need to do my homework and try and understand the different forms of LLC better. Part of why we formed it as an S was trying to shield the assets for college financial aid purposes. That turned out to be hopeless, but fortunately the kids chose colleges that gave them decent merit scholarships, that helped a lot. But if dispensing with the S gets rid of all the separate forms for my wife and I and some of the other nonsense, I'm all for it.

 

@Johann Jells

Well, the fact that you aren't doing any wages or salary should be a "violation."  S Corp's have to pay a "reasonable salary" to the members.

Having a cash piling up doesn't really matter.  Its still a pass through entity so you are still paying tax every year on your profits.

As a S Corp, you should be holding shareholder meetings (I think quarterly) with meeting minutes and having decision memorandums when you do anything "major."  I THINK not taking a salary might have pierced your corporate veil, but certainly not holding meetings with meeting minutes does.

You really need to talk to a professional about unelecting a S Corp status as it sounds like that is what you want.

FYI:  This situation sounds like my pet peeve.  People setup entities, but don't maintain them properly and necessarily out of their own fault.  If I understand correctly, while you might think you have the asset protection of a legal entity, you really don't since to my layman's understanding, you've pierced your own corporate veil.  Ignorance is bliss, huh?  I'm sorry to say this.  Its not my intention to offend.

You really need to find a professional to straighten out your books and operation.  Good luck.

Originally posted by @David M. :

@Johann Jells

Well, the fact that you aren't doing any wages or salary should be a "violation."  S Corp's have to pay a "reasonable salary" to the members.

Having a cash piling up doesn't really matter.  Its still a pass through entity so you are still paying tax every year on your profits.

As a S Corp, you should be holding shareholder meetings (I think quarterly) with meeting minutes and having decision memorandums when you do anything "major."  I THINK not taking a salary might have pierced your corporate veil, but certainly not holding meetings with meeting minutes does.

You really need to talk to a professional about unelecting a S Corp status as it sounds like that is what you want.

FYI:  This situation sounds like my pet peeve.  People setup entities, but don't maintain them properly and necessarily out of their own fault.  If I understand correctly, while you might think you have the asset protection of a legal entity, you really don't since to my layman's understanding, you've pierced your own corporate veil.  Ignorance is bliss, huh?  I'm sorry to say this.  Its not my intention to offend.

You really need to find a professional to straighten out your books and operation.  Good luck.

He is holding assets that appreciate in an S-corp. He received horrible advice as it is normally not advisable to hold appreciating assets within a corporation(S or C). 
Dissolving the s-corp would still trigger this taxable event for himself. 

@Basit Siddiqi what is the best way to hold appreciating assets like RE with a partner (ie with one other person/couple?) I’m planning to scale my vacation rental biz and may have 5 different partnerships with 5 properties in each partnership. Curious what your thoughts are. Thanks.

Yes, as others mentioned, you should seek advice.  Holding rental properties in an S corp is, well, a complete disaster.  Whoever recommended this was either not thinking or does not know RE.  There are a few exceptions where it could be OK, but now you are going to have a big tax issue if you were to dispose.

Second, cash accumulation does not waive the reasonable compensation rules. There are also consequences from "revoking" S status, so I would seek counsel on that so you don't trigger gains.  

@David M. he has clearly said he is organized as an LLC taxed as an S Corp, and never said he is organized as an actual S Corp. Shareholder meetings, etc, are not required for LLCs regardless of taxation choice (LLCs don't have shareholders!). Each state may have slightly different requirements (some require annual filings, others require nothing). In your haste to pile on to what he already called bad advice, you yourself are spreading bad information about LLCs taxes as S Corps.

Thanks all, I appreciate the comments regardless of whether they apply, as knowing the right questions to ask is half the game. FWIW we have no intention of selling anything anytime soon, but probably restructuring sooner rather than later is best. Getting good advice is going to be hard. 

As a sole proprietor, I use H&R Block software for business. Since the IRS sees this as a 'pass through', I just put it all in and let it do the rest. Last year was interesting with W2, 1099, and LLC income streams. Hopefully one day I'll be big enough to need an accountant to keep it all straight. :)

Originally posted by @Fadi Tarapolsi :

As a sole proprietor, I use H&R Block software for business. Since the IRS sees this as a 'pass through', I just put it all in and let it do the rest. Last year was interesting with W2, 1099, and LLC income streams. Hopefully one day I'll be big enough to need an accountant to keep it all straight. :)

That's exactly what I did before the LLC, with a W2, schedule E and 2 schedule Cs. Maybe I can get back there...