Help me avoid a LLCP tax mess

September 15, 2015 1:43 PM

I have a complicated situation for 2014, and I'm running out of time to sort it out. Details within.

I have a LLC partnership. In 2014 I operated in two different states (I moved and took the business with me). The move occurred in March of 2014. Before I moved, I swapped business partners - I removed the partner I started 2014 with and added another.

I had two contractors that did work for me in 2014, no employees. It appears 1099s slipped through the cracks, but I do know what I paid them and can put 1099s together (at least, I think, but I believe I need W4s).

I've done my books with Quickbooks, and they are relatively organized. I'd like to use TurboTax to process the filing, and I have the business version of Turbotax.

I'm concerned there are things I need to do regarding the change in partnership and the interstate move that TurboTax will not prompt me to do. I have not yet submitted any paperwork regarding the change in partnership. I have filed an extension, but I believe tonight is my deadline to send K-1s and the 1065. I know I need to submit a change of address form ASAP. I believe I'll need to file multiple state tax returns (for the two states I did business in, unless I can stick to one and keep things simple?).

My CPA is booked and can't take a look at this just yet (hence TurboTax). Ideally they'll be able to clarify some of these unknowns in the next few days.

What else do I need to look out for? How screwed am I if I don't make the deadline tonight? Should I wait for my CPA to look things over before making any moves? In short, what's the best path forward? (I know you are not my accountant.)

Thanks Mefi!

posted by roygbv to Work & Money (5 answers total)

I think you need to wait for your accountant or contact someone who can take you on sooner, because your initial statement has assumptions in it that make your question extremely hard to answer. Either you have an LLC or you have a partnership, but you don't have both and they're pretty different.
posted by janey47 at 2:05 PM on September 15, 2015

Response by poster: If I wait, how awful are the consequences? If we are talking small fines, that's manageable, and probably better than the consequences of filing incorrectly, right?
posted by roygbv at 2:29 PM on September 15, 2015

The 1065--I'm taking it this is what you mean by an "LLC partnership", that you're an LLC taxed on a 1065--penalty is $195/mo/partner, and I'm pretty sure you owe K1s to all three of you, so yeah. Your CPA will know better if you have any chance of getting an abatement. But coming from the tax preparer perspective, if you showed up after September 1 with your stuff, you're late. This end of the extension is for getting the straggling bits of info together, not for starting, you know? You should have started in January... or at least by July. Your CPA may be able to get you in before October 15, but since that's the individual deadline, I wouldn't count on it.
posted by Sequence at 2:47 PM on September 15, 2015

Try to see someone as soon as possible. Some state deadlines are 10/15 rather than 9/15, so depending on your two states you may be able to get at least one of your three filings (fed, state 1, state 2) in on time. The confusion between LLC and partnership is enough to give me pause when considering whether this is something you can tackle on your own.

(Also, you need to collect a Form W-9 from your contractors if you intend to give them a 1099. W-4s are for employees receiving a W-2).
posted by loolie at 6:00 PM on September 15, 2015

The confusion between LLC and partnership is enough to give me pause when considering whether this is something you can tackle on your own.

There doesn't seem to be any confusion. The OP has a multi-member LLC for state purposes. An LLC is an unrecognized entity at the federal level. A multi-member LLC is taxed by default as a partnership by the IRS.
posted by JackFlash at 6:35 PM on September 15, 2015