New LLc, single-owner. Still working part-time.?

Question

prefer personal tax separated from business tax. ??Should I file form 8832 to have two separate tax return?? Seek help, very unsure...

Answer 1

In your instance the IRS doesn't care that your a sole member LLC..(it doesn't effect how you'll be taxed).. An LLC is whats known as a pass-through business entity. Meaning all income & expenses will pass to you and be taxed to you.. If you were a partnership LLC you would need to complete a schedule S showing how you divided the LLC's income & expenses among its members, but as a sole proprietor you would file your individual 1040 and include any income & expenses from your LLC on a Schedule C which would then be carried over to page 1 of your individual 1040 as business income (a different line then wages, Line 7 on page one of your 1040). To figure the tax on just your business income subtract your wages from your adjusted gross income (line 38) and recaculate the tax on just your business income (aside from income tax , there is also a self employment tax (social sec. & FICA) for business income.. Any earned income (wages) from another job would be included on a different line as wages (line 7) on your 1040..

You don't need to file form 8832, thats for a C corporation wishing to elect to file as an S Corp.

An LLC basically limits your liability's but does little for taxes since an LLC can not retain earnings, as in a corporation....