Have a Tax Question? Ask a Tax Expert
when you say close your employment tax account, what does that entail? The state is saying I need to pay past Unemployment Insurance even though I'm the only employee because of the way taxes were filed in past years.
If you paid wages - you filed employment tax returns for these two years - federal forms 940 and 941 - if you want to eliminate wages - you need to amend these tax returns. Filing a final tax return is indicates on the form by checking the box final - and the IRS woudl close your employment tax account.
See for reference - http://www.irs.gov/pub/irs-pdf/f940.pdfAlso - you need to check "Amend" box if you are making changes for past filing.
ok. can I still keep my EIN after I close my employment tax account?
If you are a solo proprietor and do not have employees - you do not need EIN.But yes - you will keep it as long as you have the LLC.
You will also need to close your employment tax accounts with the state.
If I amend the past returns how to I resolve the issue of the monies paid on the w2s?
You woudl need to issue corrected W2 form with zero wages and send them to the IRS with amended 940 employment tax returns.Then - you need to amend your individual tax return form 1040 - and report all your self-employment income on schedule C - use form 1040X to amend.In this case - wages would be zero.
Thanks for all your help
Sorry for your situation. I just thought that amending everything would be a lot of paperwork - and some additional overhead.