banjodude
Level 2

Got my first LLC client, single owner in PA. Does it just go on Sch C, and how do you indicate it's an LLC? Otherwise, it just appears as a sole proprietor Sch C. 

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IRonMaN
Level 15

Yes, it goes on a schedule C unless they made an election to be treated differently.  There is nothing extra to do as far as indicating it is an LLC on the schedule C.


Slava Ukraini!
abctax55
Level 15

What Jeff said...

SOME states (like California) require an additional form AND an LLC tax/possibly a fee also.  

So find out if PA does (or wait for a PA preparer to chime in.

HumanKind... Be Both
banjodude
Level 2

Thanks. Let's hope it's that easy. 🙂

Kevin

qbteachmt
Level 15

A few basics you need to know, because you asked a very basic question and that's a bit concerning, so heads Up:

LLC is a State construct, so make sure you know what applies to the State(s) being referenced.

Federally, Single member LLC (SMLLC) means it is not a partnership, by definition. That makes it a Sole Proprietorship, so that makes it Schedule C.

A multi-member partnership LLC is filed on form 1065.

In all of these above structures, there is no payroll for these people.

An LLC is a legal entity and can apply for Corporate treatment. It might be S corp, but does not need to be.

Corporate status means required payroll for the working members/partners/shareholders. But now there is no Owner, so no Owner draw.

You have a lot of due diligence to do for these considerations, as your tax payer won't know or has it confused when they present it to you. And get a reference for when they needed to get a new EIN for when they tell you, "We changed last year."

If you don't get this part right from the beginning, everything flowing out of here is going to be headed down the wrong route.

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banjodude
Level 2

Thanks. They did indicate is a 1-person LLC with no payroll, so that much I know. Simply selling medical supplies. Not sure of the purpose of the LLC since it’s treated the same as a sole proprietor.  Why an LLC? And if it gets complicated I’ll simply tell them to look elsewhere for a preparer who can help them. 

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George4Tacks
Level 15

LIMITED LIABILITY COMPANY. In my humble opinion spend the money on liability insurance rather then the complexity of forming the LLC. Ask your client who suggested this - The barber - The barkeep - The bus driver - He heard an ad on the radio.

This is outside your wheelhouse since they already did it, but prepare yourself for when someone asks you about it BEFORE they do it. 


Answers are easy. Questions are hard!
BobKamman
Level 15

What @George4Tacks said.  If anyone is going to sue the LLC, they're going to sue the single member also, and let the liability be sorted out by the insurance companies.  

But did you know that the United State of America is a Texas corporation?  Yes, Elon Musk registered United States of America Inc. with the Texas Secretary of State in October 2024.  Because, sometimes doing business as a corporation impresses people, even if the name itself is losing respect worldwide.  If you want something fancier than a dba, might as well consider a Lemmings Leaping Cliffs LLC.