Help me sort through my income tax filing options
March 22, 2014 11:45 AM Subscribe
Free online tax filing that allows a Schedule K-1?
I need to file my income taxes and for the most part they should be pretty simple. I own no property, have no investments, all my income is from a single employer in one state, and so on. So in the past I’ve been able to use the free TurboTax e-file and everything was easy.
The only complication now is I’m listed as a partner in my dad’s LLC and receive a K-1 form that I’m supposed to file. I don’t actually earn any income from the LLC, but I’m on it just for legal reasons in case something happened to him. My understanding though is that even without earning anything I still have to note the LLC’s tax ID number on my return and just report $0 on it. TurboTax, however, wants to charge me for their Premier version just to do that though (which more than wipes out any refund I might be getting). I know there are other services that also do free filing, but do any allow for the K-1?
(And yes, I know I could just do everything manually, but I prefer the ease of e-filing if possible.)
I need to file my income taxes and for the most part they should be pretty simple. I own no property, have no investments, all my income is from a single employer in one state, and so on. So in the past I’ve been able to use the free TurboTax e-file and everything was easy.
The only complication now is I’m listed as a partner in my dad’s LLC and receive a K-1 form that I’m supposed to file. I don’t actually earn any income from the LLC, but I’m on it just for legal reasons in case something happened to him. My understanding though is that even without earning anything I still have to note the LLC’s tax ID number on my return and just report $0 on it. TurboTax, however, wants to charge me for their Premier version just to do that though (which more than wipes out any refund I might be getting). I know there are other services that also do free filing, but do any allow for the K-1?
(And yes, I know I could just do everything manually, but I prefer the ease of e-filing if possible.)
If there's no income I don't see why you'd have to report it. Say the IRS audits; what could possibly happen?
posted by jpe at 3:54 PM on March 22, 2014
posted by jpe at 3:54 PM on March 22, 2014
I had a similar issue with TurboTax and Schedule C and ended up using H&R Block. However, it looks like you only get Schedules C and E for free if you qualify for Free File (if you make less than $58,000) since the IRS link seemingly sends you to the $36.99 version, not the free version you find on H&R Block's website. If that fails, I'd just do it by hand. It's not going to be hard, especially with no income from the LLC.
posted by hoyland at 4:34 PM on March 22, 2014
posted by hoyland at 4:34 PM on March 22, 2014
I'm guessing that the K-1 is from an S-corp - I believe their only issued for S-corps, partnerships, and some trusts and estates, and an S-corp sounds like it's the most likely. The way S-corps are taxed is that the taxes are the responsibilities of the owners. The corporation itself owes no taxes.
As an example, assume that the S-corp made $100,000 profit in 2013, and you own 25%. Your taxable income is increased by $25,000. Most S-corps have mandatory distributions for tax payments, so you should be getting money to pay those taxes.
In short, if Part III line 1 of the K-1 is non-zero, and you own a non-zero percentage (Part I box F), you may owe taxes on the S-corps income.
posted by unix at 6:57 PM on March 22, 2014
As an example, assume that the S-corp made $100,000 profit in 2013, and you own 25%. Your taxable income is increased by $25,000. Most S-corps have mandatory distributions for tax payments, so you should be getting money to pay those taxes.
In short, if Part III line 1 of the K-1 is non-zero, and you own a non-zero percentage (Part I box F), you may owe taxes on the S-corps income.
posted by unix at 6:57 PM on March 22, 2014
This thread is closed to new comments.
posted by muddgirl at 1:18 PM on March 22, 2014