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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16547
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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If I have a LLC how do I report what the business paid me as

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If I have a LLC how do I report what the business paid me as income, payroll, dividends? Does how I pay myself bring my net business income down in any way. I have done my federal taxes. My federal income before net operating loss deduction and special deductions is $18088. My net profit is listed as $16885. I did not show dividends from my business. I am using the M4 series/Corp Franchise Tax Return. How do I get my apportionable income down to reduce my state tax liability?

MyVirtualCPA :

Hello and thanks for using JustAnswer.com. How are you today?

MyVirtualCPA :

I just wanted some clarification on your question. Are you trying to get instructions on how to file your federal return?

Customer:

a bit stressed but otherwise well

MyVirtualCPA :

No reason to be stressed

Customer:

Looking for feedback on how to file my mn tax liability.

MyVirtualCPA :

Your state return?

Customer:

But I am wondering if I should have listed things differently on my federal.

MyVirtualCPA :

If you're an LLC you are by default a disregarded entity or a corporation if you elect to be taxed as a corporation

Customer:

Say more...can you describe disregarded entity?

MyVirtualCPA :

If you are in business with just yourself you would file schedule C

MyVirtualCPA :

if you had a partnership with more than one other person then you would file a partnership tax return

Customer:

I am in business with just myself. I used Turbo tax for my husband and my federal tax return. I am looking for a schedule C... or is this a separate form...?

MyVirtualCPA :

Thats correct

MyVirtualCPA :

It's form 1040 Schedule C ...

Customer:

I have a schedule C...and nothing is listed on this form...

MyVirtualCPA :

Okay

MyVirtualCPA :

So what is your question about your state return?

Customer:

I have schedule C-EZ... this lists my business info: type/ name/ address/ Gross receipts, total expenses, net profit, vehicle info, ... The only other form I have related to tax my tax liability is Schedule 1040 SE

MyVirtualCPA :

That's correct

MyVirtualCPA :

So what is your question about your state return?

Customer:

I thought I read online that I have to prepare a Corp Franchise Tax Return.

MyVirtualCPA :

If you are a business, yes...

Customer:

I am an independent contractor/ Therapist. I filed for an LLC at the onset of this contractor position I took

MyVirtualCPA :

Yes, but if you are a business (LLC) then you file the franchise tax return

MyVirtualCPA :

However

MyVirtualCPA :

you are a single member LLC

MyVirtualCPA :

This is what Minnesota says about your filing requirement:

Customer:

yes, single member LLc

MyVirtualCPA :
Limited liability company (LLC).

An LLC is

required to file its Articles of Organization with

the

Office of the Secretary of State

and apply for an

FEIN and a Minnesota tax ID number. A one-

member LLC will be taxed and have the same filing

requirements as the member. (If the member is an

individual, the LLC will be treated as a sole propri

-

etorship. If the member is a corporation, it will be

treated as part of the corporation.) LLCs with two

or more members have the same tax and filing re

-

quirements as either a partnership or corporation,

depending on the characteristics of the LLC

MyVirtualCPA :

Sorry about the formatting, I copied and pasted that from this link:

MyVirtualCPA :

http://www.revenue.state.mn.us/businesses/scorp/Documents/publications_brochures_pdf_content_business%20entities%5B1%5D.pdf

MyVirtualCPA :
Sole proprietorship.

A sole proprietorship is not

subject to state rules covering organization or op

-

eration. If the business’s name is XXXXX XXXXX the

owner’s, it must be registered as an assumed name

with the Office of the Secretary of State. Income

and expenses are reported on Schedule C of the

owner’s federal Form 1040,

Individual Income Tax

Return

.
MyVirtualCPA :

So, in your case the M4 is not required.

Customer:

In my opinion, you are wonderful!!!! I was certainly reading into everything and have spent much time worrying. so my schedule C-EZ covers me? just to be sure.

MyVirtualCPA :

Yes, but you will still file your normal state income tax return

MyVirtualCPA :

but no M4 - that's for a corporation

MyVirtualCPA :

I gave you the link

MyVirtualCPA :

There are many LLCs that elect to be treated as a corporation, which is where your confusion comes from.

Customer:

thanks much,

Customer:

that is all I need for tonight.

MyVirtualCPA : You're welcome
MyVirtualCPA : Please rate my response ec
MyVirtualCPA : please rate my response excellent so that I may be compensated for assisting you today
Customer:

Me again,

Customer:

I did a turbo tax state return.. how do I know I am covered in paying my business taxes?

Customer:

Is there a form I should look for?

Customer:

oh wait, I think I have it.

Thanks for allowing me to assist tonight. Please rate my response as excellent so that I may receive credit for assisting tonight. Thanks again for using justanswer.com and have a great night.
I see you have another question. How may I help you?
You will file your Minnesota tax as an individual like you do for your federal returns.

Thanks again for using JustAnswer.com and have a great day.

** Please take a moment to rate my response as "Excellent" so that I may receive credit for assisting you today. Please let me know if my assistance was anything less than "OK Service", as I am compensated based on whether or not I have assisted you with your issue. If you need further clarifications, PLEASE WAIT TO RATE MY ANSWER UNTIL AFTER RECEIVING FOLLOW UP FROM ME. If I receive anything less than OK Service, I do not get paid. Thank you for your kind understanding in this matter. If you have difficulties rating, then simply respond stating that you are having difficulties rating and thank me for my excellent, good, or ok service and we can get the rating applied by the site. This answer is not financial or legal advice, and must not be used as such. For financial and legal advice, please contact a local professional.*

You should be aware that your question, as with most tax questions, can never really be answered completely...addressing all the permutations; that is because of the many assumptions that have to be made I have done my best to determine what I think you are asking and answering it in the most direct and understandable manner possible. If, however, after reviewing the questions, you have any uncertainties or further questions, please do not hesitate to ask.

Megan C and other Tax Specialists are ready to help you
Please let me know if you need anything additional. Thanks again for using JustAnswer.com and have a great night.

** Please take a moment to rate my response as "Excellent" so that I may receive credit for assisting you today. Please let me know if my assistance was anything less than "OK Service", as I am compensated based on whether or not I have assisted you with your issue. If you need further clarifications, PLEASE WAIT TO RATE MY ANSWER UNTIL AFTER RECEIVING FOLLOW UP FROM ME. If I receive anything less than OK Service, I do not get paid. Thank you for your kind understanding in this matter. If you have difficulties rating, then simply respond stating that you are having difficulties rating and thank me for my excellent, good, or ok service and we can get the rating applied by the site. This answer is not financial or legal advice, and must not be used as such. For financial and legal advice, please contact a local professional.*

You should be aware that your question, as with most tax questions, can never really be answered completely...addressing all the permutations; that is because of the many assumptions that have to be made I have done my best to determine what I think you are asking and answering it in the most direct and understandable manner possible. If, however, after reviewing the questions, you have any uncertainties or further questions, please do not hesitate to ask.

Thank you for the positive rating. I really enjoyed working with you – please feel free to request me again when you come back to ask another question. Simply enter "MyVirtualCPA" in the subject of your question, and it will be routed directly to me. Thank you again for using JustAnswer. For the quickest service, please post a new question.