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For a LLC that is organized in 7 states do I file Tax as a…

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For a LLC that is...
For a LLC that is organized in 7 states do I file Tax as a corporation or do I file Tax as a LLC? Which tax form do I use to file Tax?
Submitted: 24 days ago.Category: Tax
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5/26/2018
Tax Professional: Lane, JD, CFP, MBA, CRPS replied 24 days ago
Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 14,404
Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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Hi. …. My name’s Lane,

I hold a law degree (J.D.), with concentration in Tax Law, Estate law & Corporate law, an MBA in finance, a BBA, and CFP & CRPS (Chartered Retirement Plans Specialist) designations, as well - I’ve been providing financial, Social Security/Medicare, estate, corporate, non-profit, and tax advice, to clients on three continents, since 1986.

I’m reading your question now.

Bear with me a couple of minutes while I type up my response.

….

Then if you have further questions we can go from there.

(If the site makes one of those automated phone call offers, that DID NOT COME FROM ME. It’s an automatic offer that the site throws up there, I’d be glad to discuss this over the phone but the site charges more for that. Only accept if you’d like a call.)

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Tax Professional: Lane, JD, CFP, MBA, CRPS replied 24 days ago

An LLC is a relatively new hybrid between the centuries-old business form, the corporation, and an individual that is not really separate from his/her business (the sole proprietorship, or partnership if more than one owner). It's the fastest growing entity type out there (because of its flexibility and low cost, while still providing the corporate liability protection of the corporation)

...

All corporate law (which controls both corporations and LLCs) is state law (with exception of some insurance and banking law).

...

We can only organize (the legal term for setting up and registering with the secretary of state) in one state. We, then, register with other states as "foreign" corporations or LLC's to do business in those states (otherwise we face penalties and get no corporate liability protection).

...

You may have heard the term, "a Delaware Corporation," or "a Texas Corporation," or a "GA LLC." This refers to where the corporation or LLC is organized ... and has almost nothing to do with where the owners live or do business.

...

In terms of taxation, you can elect to be taxed as a C-Corporation (the old regular corporation) or as an S-Corporation (not a corporation at all but a tax election allowing for a passthrough-like form of taxation)

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The C-Corp (unless you have specific reasons like going public, issuing various classes of shares, attracting angel investors who want preferred stock, etc) almost never makes sense because of the double taxation you may have heard about with C-Corps. First the corporation itself is taxed on its profits (paying its taxes at corporate rates from the corporate tax return, form 1120) but then if you want to pull money over and above your salary from the corporation, that's taxed AGAIN, as a dividend on your regular personal return.

...

Electing S-Corp taxation (although adding the rigidity and additional administrative overhead of the S-Corp - required salary, quarterly payroll tax forms, paying in Social Security and Medicare at least monthly, a separate return and K-1's, even though the taxation is all passed to the individual) MAY save some on Social Security and Medicare taxes (if your profitability is WELL over what IRS will require that you pay yourself as a salary anyway) ... but there's no difference in federal and state income taxes at all.

...

Most find that simply filing the schedule C ... as an LLC (profit and loss form Business) as a part of their regular 1040 is MUCH simpler, and again, your profit needs to be at a place that's WELL over the required S-Corp salary for the savings on Social Security and Medicare to offset the additional cost and overhead of the S-Corp.

...

AND the form 2553 to have your LLC taxed as an S-Corp can be filed anywhere along the way (in any future year where you see that the profits are getting high enough that there could be any real savings over and above the additional cost and audit risk of the S-Corp.

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Customer reply replied 24 days ago
If I open Donuts 9 in NV, MA, and NY, do I file tax as a corporation or LLC? Lets say its registered as a LLC in all three states.
Tax Professional: Lane, JD, CFP, MBA, CRPS replied 24 days ago

At a very high level, there are two classes of the way to pay business taxes; (1)the C-Corp, where the corporation pays its own tax, and the owners pay on that profit again if distributed as a dividend), and (2) as a pass-through, where the tax is not taxed to the entity, but rather passed through to the owners personal return.

...

The pass-throughs are as follows

Sole Proprietor

  • LLC not taxed as a partnership or corporation
  • Partnership
  • S-Corp
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Customer reply replied 24 days ago
which one do I file?
Tax Professional: Lane, JD, CFP, MBA, CRPS replied 24 days ago

Unless you ELECT corporate taxation (8832 to elect C-Corp taxation, 2553 to elect S-Corp taxation) you will file as a self employed LLC owner

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Tax Professional: Lane, JD, CFP, MBA, CRPS replied 24 days ago

If you simply register and do nothing to elect a special form of taxation, you're self-employed and file a schedule C along with your personal return

...

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Customer reply replied 24 days ago
do I file a tax form for each or just one tax form for all three?
Tax Professional: Lane, JD, CFP, MBA, CRPS replied 24 days ago

You'll file one federal form and a state form to pay the state income taxes on the portion of business that comes from those states

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Customer reply replied 24 days ago
I'm talking about IRS forms. Do I file one IRS form for all three or do I file three forms?
Tax Professional: Lane, JD, CFP, MBA, CRPS replied 24 days ago

That's the federal form ... IRS administers Federal taxes

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Tax Professional: Lane, JD, CFP, MBA, CRPS replied 24 days ago

One form

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Customer reply replied 24 days ago
which form?
Tax Professional: Lane, JD, CFP, MBA, CRPS replied 24 days ago

But the states have jurisdiction ton tax you too if you have "nexus" in their state ... a physical presence

...

Are you a US resident?

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Tax Professional: Lane, JD, CFP, MBA, CRPS replied 24 days ago

or citizen? or greencard holder? or will spend more than 183 days in US?

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Customer reply replied 24 days ago
No, Canadian citizen
Tax Professional: Lane, JD, CFP, MBA, CRPS replied 24 days ago

1040NR (NR stands for non-resident)

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Customer reply replied 24 days ago
how about the FORM 1065? Could I file 1065 instead?
Tax Professional: Lane, JD, CFP, MBA, CRPS replied 24 days ago

The 1065 is for partnerships.

...

LLCs with more than one member (owner in LLC terminology) - unless they elect one of the forms of corporate taxation - file a partnership return, form 1065

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Customer reply replied 24 days ago
which form do I need to file in order to use Form 1065?
Tax Professional: Lane, JD, CFP, MBA, CRPS replied 24 days ago

You can't unless there are two owners... If there are two owners (partners) then you MUST file the 1065 (unless you elect a corporate form of taxation)

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Customer reply replied 24 days ago
how do I elect corporate form of taxation ?
Tax Professional: Lane, JD, CFP, MBA, CRPS replied 24 days ago

Why in the world would you WANT to file a 1065 when you can just file a regular personal return with a little schedule C.

...

You'll STILL have to file the 1040NR either was as the tax (as I pointed out above) flows to the individual.

...

On the corporate tax election, I told you that above .... 2553 for S-Corp 8332 for C-Corp

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Tax Professional: Lane, JD, CFP, MBA, CRPS replied 24 days ago

And the same question on that one ... after everything I told you above ... why would you want to elect corporate taxation when the LLC already provides the corporate liability protection without all of the additional costs (and taxes with the C-Corp)

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Tax Professional: Lane, JD, CFP, MBA, CRPS replied 24 days ago

I've given yoiu a very thorough and accurate answer ... especially for this quick Q&A site.

...

Would appreciate a positive rating (by using those the stars on your screen, and then clicking “submit”)

Otherwise, I receive no compensation for the work here.

...

Thank you!

Lane

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