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PDtax
PDtax, CPA, MBA
Category: Finance
Satisfied Customers: 4306
Experience:  Tax professional and business consultant for 35 years.
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I am in a partnership where my LLC owns 33.33 percent of

Customer Question

I am in a partnership where my LLC owns 33.33 percent of another LLC. However my partners always file to pay their taxes later on, using an extension. Since they didnt have their tax stuff ready for the LLC that I own 33 percent in, I had to also file
an extension which to me is very annoying. Is there any way to get past this, and have this not happen again next year? I would rather not file for an extension and have all my other business that I operate have to wait until september to file just because
of this one partnership I decided to join in. Also is there any negative impacts to filing an extension? For me Id rather not give the IRS any reason to audit me, including filing for extensions.
Submitted: 1 year ago.
Category: Finance
Expert:  PDtax replied 1 year ago.

Hi from just answer. I'm PDtax, and will assist.

Filing extensions are, unfortunately, standard operating procedure for pass through entities and their owners. Unless ownership pushes to get the returns done early, extensions are very common for pass throughs for several reasons.

Expert:  PDtax replied 1 year ago.

One reason many partners don't think of was the original April 15th deadline for timely filing. With a crush of personal tax returns due at the same time, it often becomes a matter of doing what can be done by the deadline. In our practice, for example, anything in after April 1 is tiled up front to expect an extension. Partnership returns, with their added complexity and record keeping, take much longer to complete and deliver k-1s to partners before April 15th. Think out of state filings and mailings. Just a perspective from getting the return completed.

Expert:  PDtax replied 1 year ago.

IRS does not increase your odds of audit if you file with an extension. All returns are subjected to the same audit scoring.

Customer: replied 1 year ago.
The thing is that my CPA files my personal and business returns at the same time.. now my entire personal and also my other businesses have to wait just because my partners in this ONE partnership decide to take their time each year in paying taxes. I dont want to get out of the partnership but id rather pay my taxes on time to save the headache on all my other multiple LLCs that i own.
Expert:  PDtax replied 1 year ago.

You might want to consider transferring your partnership interest to a separated entity that could file its own return, allowing you to file your 1040 timely.

Thanks for asking at just answer. Positive feedback is appreciated. I'm PDtax.

Customer: replied 1 year ago.
I have multiple LLCs, which flow into one Holdings LLC which is classified as an S corp for tax purposes. I believe we set it up this way so I can pay myself a salary and pay less in taxes. So are you saying even if im paying my personal and business taxes together I can actually create one more return just for my other LLC that owns 33 percent of the partnership LLC? I dont personally own stake, I created an LLC that owns 33 percent of it which im the owner of.
Expert:  PDtax replied 1 year ago.

Isolating the LLC interests like you have in an S means you likely file everything at once, near September 15th. My advice, suggesting you isolate one LLC and holding entity, needs to be revised fit your new facts.

Expert:  PDtax replied 1 year ago.

Since you use an S corp fit multiple LLC interests, you are stuck waiting for all the k-1s. Consider instead converting your s corp to a C corp, which would isolate your w-2 and allow you to file personally by April 15 th. You might be surprised there could be a current tax savings as well.

Expert:  PDtax replied 1 year ago.

Please rate my assistance with your question. I'm PDtax.