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Anne
Anne, Master Tax Preparer
Category: Tax
Satisfied Customers: 2439
Experience:  Enrolled Agent with 25 Years Experience specializing Individual and Small Businesses
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I HAVE A GAY UBER DRIVER CLIENT WHO FORMED LLC WITH HIS

Customer Question

I HAVE A GAY UBER DRIVER CLIENT WHO FORMED LLC WITH HIS BOYFRIEND LAST NOV. BOTH ARE MANAGERS IN LLC PER STATE SUBMISSION. MADE SMALL INCOME. BF DOES NOT MEET LIMIT TO FILE PERSONAL TAXES. NOT MSRRIED/RDP. DO I NEED TO FILE PARTNERSHIP RETURN?
Submitted: 1 year ago.
Category: Tax
Expert:  Anne replied 1 year ago.
HiI'm Anne. I've been preparing taxes for 28 years and I'll be happy to help you. You only mentioned that one of them was under the filing requirement. Still, if they filed for an EIN # ***** officially declared this a Partnership, then you will need to file a Partnership return, and show how much each partner made, even if one of them doesn't have to file a return (and if they were both General Partners, then keep in mind that they have to file when their SE income is >$400) If you have found this answer helpful, please take the moment to rate positive by clicking on the stars.It is ONLY through positive ratings that we are compensated for our time and knowledge Thank you for choosing justanswer.
Customer: replied 1 year ago.
ok. but they did not form a partnership per se. They are a domestic LLC. They are both LLC managers. major income for my guy was his W2 job. only one guy worked for Uber in fact and made very little money.partnership return prep fee almost more than he made. they do have an EIN. WOULD IT BE WRONG TO FILE SCH C with all income as my client's? Maybe consider partnership never collected money so no need to file. i do not want to get self or client in trouble.
Expert:  Anne replied 1 year ago.
I totally understand. Been there myself, so I understand the feeling. Here are some things to consider though...1-when they applied for the EIN# ***** that number assigned to a Partnership? (this shows intent, and there are some states, CA is the first that comes to mind, that actually charge you for the opportunity to run a business in their state.) So you're going to want to check if your state (their state?) assess a fee just for having a business entity set up in their state, whether you did any business from that entity or not. 2-It is always a risk when you ignore (forgive me. I know ignore implies intent. I just can't think of a better word right now) but if you ignore information that has been provided to you by your tax client. Even saying that, I understand you're reporting all of the income, but if the Partnership states that they are equal partners in everything, including income, then by filing a Sch you may very well be under reporting the other partner's income. You will need to see the paperwork from when they formed the partnership that shows their split (50/50?) of income and expenses. You can file a Sch C, and then if audited write a letter stating that the business was not run as a Partnership in 2015, but as an EA, I can't recommend you do this. I hope this helps.
Customer: replied 1 year ago.
I checked with my client. All Uber payments have come to him direct. His BF has not worked for Uber yet. SO I SEE KNOW REASON WE CANNOT LEGALLY SAY IT IS AN INTENDED START UP that has not started up--NO INCOME = NO NEED TO FILE. Do you agree?
P.S. I am an EA as well. I do like to double check.
Expert:  Anne replied 1 year ago.
It's always good to double check.......I know I do I'm assuming then that all of the payments had his SS# ***** not the one for the partnership. If that's the case, then based on the information you just provided, I think you're on pretty solid ground to file the Sch C. I hope this helps