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2012 business tax filing help. 1. 2012 Formed LLC(Texas) for

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2012 business tax filing help. 1...
2012 business tax filing help.
1. 2012 Formed LLC(Texas) for physician service.
2. Feb 2013, CPA suggested to formed PA(PLLC) and original LLC dissolved since it is not the correct entity.
3. Filed for extension.
4. Person helping filing the tax closed the business.

Need help and guidance how to proceed further please.
Submitted: 4 years ago.Category: Tax
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Answered in 12 minutes by:
6/26/2013
Tax Professional: Lev, Tax Advisor replied 4 years ago
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 30,132
Experience: Taxes, Immigration, Labor Relations
Verified

LEV :

Hi and welcome to Just Answer!

A professional limited liability company (PLLC) is a business entity specifically designed for licensed professions, such as doctors. Most states generally don’t allow LLCs for businesses where a license is required.

The main reasons to form a PLLC is because it is a separate legal entity and provides some level of protection for the individual owner.
For tax purposes - there is no difference between the LLC and PLLC.

LEV :

An LLC (or PLLC) is a business structure allowed by state statute.

Depending on elections made by the LLC and the number of members, the IRS will treat an LLC as either a corporation, partnership, or as part of the LLC’s owner’s tax return (a “disregarded entity”).

An LLC with only one member is treated as an entity disregarded as separate from its owner for income tax purposes (but as a separate entity for purposes of employment tax and certain excise taxes), unless it files Form 8832 and affirmatively elects to be treated as a corporation.
Specifically, an LLC with only one member is treated as an entity disregarded as separate from its owner for income tax purposes. That means - the LLC doesn't file its own income tax return - but all income and expenses are reported on owner's individual tax return.

LEV :

For federal tax purposes - you will report all business income and expenses - on the schedule C -http://www.irs.gov/pub/irs-pdf/f1040sc.pdf
The net income (after deductions)will be reported on the form 1040 line 12 - http://www.irs.gov/pub/irs-pdf/f1040.pdf
If the business has net income over $400, it may be required to file Schedule SE, Self-Employment Tax and net income is likely self-employment income and 15.3% self-employment tax would be required.
Self-employment taxes from schedule SE will go to the form 1040 line 56 - http://www.irs.gov/pub/irs-pdf/f1040.pdf
Also - you will deduct half of self-employment taxes on the line 27.
Generally - that all you needs for income tax purposes . Please review all possible deductions - that might help to reduce income tax liability.
You may either prepare your tax return by yourself or may use any tax preparation service.
If you decide to do by yourself - you may either fill tax forms or may use a tax preparation software.
I provided above referenced to forms - please take a look. You may print them from the IRS website.

JACUSTOMER-dcqr6406- :

Can I give you bit more details to get you a better picture?

LEV :

Absolutely. Please post here.

JACUSTOMER-dcqr6406- :

Thank you.

LEV :

You are welcome.

JACUSTOMER-dcqr6406- :

I am a software engineer & my wife a physician, I created the an LLC called Zaisha Medical Inc which is an LLC which we both are partners.

LEV :

And you are living in which state?

JACUSTOMER-dcqr6406- :

my wife worked part time under Zaisha Medical Inc. when it comes to filing taxes that's when CPA pointed out Texas doesn't allow physicians to work under LLC

JACUSTOMER-dcqr6406- :

Oklahoma.

JACUSTOMER-dcqr6406- :

company was registered in Texas.

LEV :

What was a reason to register an LLC in a different state?

JACUSTOMER-dcqr6406- :

we originally from Texas and we plan to move back to Taxas.

JACUSTOMER-dcqr6406- :

Person helping us taxes suggested and formed PA(Zaisha Medical PA) and dissolved Original LLC (Zaisha Medical Inc.)

JACUSTOMER-dcqr6406- :

She filed for tax extension as well, now the person helping us is no longer with the company, just kind of lost state.

LEV :

So what is your question about that?

JACUSTOMER-dcqr6406- :

how would you suggest about filing taxes?

LEV :

Because the LLC had two members - it is generally treated as a partnership for tax purposes.
If there were not any transactions provided via the LLC - you may simply ignore it - and report all income and expenses on schedule C as mentioned above.
If there were transactions - you will need to file a tax return for the partnership.

JACUSTOMER-dcqr6406- :

All the transactions were on original LLC, nothing on new PA.

JACUSTOMER-dcqr6406- :

"you will need to file a tax return for the partnership." Is it ok to file taxes under llc even though she worked as Physician

JACUSTOMER-dcqr6406- :

? even though it has been dissolved?

JACUSTOMER-dcqr6406- :

where you located?

LEV :

Again - the LLC is formed under state statutes - and state statutes dictate what may be dome under the LLC. For federal tax purposes - the LLC with several member is a partnership.
If the partnership had income - the tax return is required.
If the partnership was dissolved - you will check the box Final on the partnership tax return - form 1065.

LEV :

All business income and expenses are reported on the partnership tax return form 1065 - http://www.irs.gov/pub/irs-pdf/f1065.pdf

LEV :

Partnership should issue schedules K-1 to each partner reporting pro-rata share of net taxable income - http://www.irs.gov/pub/irs-pdf/f1065sk1.pdf
A partnership is the relationship existing between two or more persons who join to carry on a trade or business. Each person contributes money, property, labor or skill, and expects to share in the profits and losses of the business. A partnership must file an annual information return to report the income, deductions, gains, losses, etc., from its operations, but it does not pay income tax. Instead, it "passes through" any profits or losses to its partners. Each partner includes his or her share of the partnership's income or loss on his or her tax return. Some additional information about partnerships may be found in IRS Publication 541 -http://www.irs.gov/publications/p541/index.html

LEV :

Let me know if you need any help.

LEV :

For filing requirements - see instructions page 3 - http://www.irs.gov/pub/irs-pdf/i1065.pdf
Except as provided below, every domestic partnership must file Form 1065, unless it neither receives income nor incurs any expenditures treated as deductions or credits for federal income tax purposes.
Entities formed as LLCs that are classified as partnerships for federal income tax purposes have the same filing requirements as domestic partnerships.
So far - based on your statement "All the transactions were on original LLC" - the partnership tax return is required.

JACUSTOMER-dcqr6406- :

original LLC is of sub-chapter S-corp, is that make in difference.

JACUSTOMER-dcqr6406- :

If you live in US,would you be available/interested in helping me file this tax return?

LEV :

Yes - that is important information. That means - S-corporation should file the tax return using form 1120S.
I am in St Louis MO.
However rules on this site prevent me from contacting customers outside the site...
Also - as you might noticed - posts on Just Answer are for general information, and are not intended to substitute for informed professional advice and do not establish a professional-client relationship.
In additional - if you are looking for a tax preparation service - you better to have someone from your state.
Sorry if you expected differently.
Nevertheless - I would be glad to address all your tax related questions.

JACUSTOMER-dcqr6406- :

No problem, you are providing the direction I was looking for thank you.

JACUSTOMER-dcqr6406- :

In addition to filing 1120S, anything else need to be filed?

JACUSTOMER-dcqr6406- :

Could you suggest any online filing option for 1120S form?

LEV :

The issue is that S-corporation should pay wages - and if wages are not paid before Dec 31 and employment tax return was not timely filed and employment taxes were not remitted to the IRS - there will be large penalty.
Based on that - I strongly suggest to have a local CPA helping you.

Ask Your Own Tax Question
Tax Professional: Lev, Tax Advisor replied 4 years ago
Just in case you were not able to use the chat - I am switching to Q&A mode and porting the answer below.
Please feel free to communicate if you need any clarification or have other tax related issues.

The issue is that S-corporation should pay wages - and if wages are not paid before Dec 31 and employment tax return was not timely filed and employment taxes were not remitted to the IRS - there will be large penalty.
Based on that - I strongly suggest to have a local CPA helping you.
Ask Your Own Tax Question
Customer reply replied 4 years ago

The whole point of me coming here is to do by myself, if not I wouldn't waste time & money here, so from that point how can you help/suggest next steps in filing tax in my case please.


 


Tax Professional: Lev, Tax Advisor replied 4 years ago
You are NOT required to to have a local CPA helping you - that is recommendation based on complications - not requirement. Please excuse me if that sounds offending.
So - you are perfectly fine to file all required tax returns by yourself.

Because you has S-corporation - you need to file following:
- S-corporation income tax return - form 1120S - also marking it as a Final tax return - assuming - it was dissolved in 2012. If not - you will file another tax return for 2013.
- because S-corporation had income - it is required to pay wages. You need to file employment tax return - form 940.
- in additional - wages must be reported on W2 - which should be sent to the employee and to the IRS.
- the net income of S-corporation will be reported to shareholders on K1.
- you will use both W2 and K1 for filing your individual tax return.

Let me know if you need any help.
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Ask Lev Your Own Question
Lev
Lev
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Category: Tax
Satisfied Customers: 30,132
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Experience: Taxes, Immigration, Labor Relations

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