Sole Member LLC Questions owners already ask

Is the company its own federal taxpayer

Often, no. A limited liability company with one owner is disregarded for federal income tax unless an election says otherwise. The profit goes on the owner's return. The company can still have a bank account, a lease, and a state report of its own.

The personal tax page walks through that.

If you have a letter that says the company was supposed to file a federal income tax return you have never heard of, do not pay it from embarrassment. Read it with us. The letter might be about a year an election was in force, or it might be about something else entirely.

Can I just call my draws a salary

Not while the company is disregarded and no election is in force. A draw is a draw. A wage needs an election that applies to that year, a reasonable amount, and a provider you run.

Wages have a page because this shortcut causes so many messy quarters.

Calling a draw a salary in the bookkeeping software does not create the payroll tax filings. It creates a book that disagrees with the returns. We undo that when we find it.

Does my spouse's help make us a partnership

Help is not membership. Membership is the agreement and the state record. Spouses who both own the company, in a community property state, have a choice to talk through before filing. Spouses who do not own it need a different answer, which might include wages and might not.

That page is the careful version.

Where do health premiums go

Usually onto the personal return, once, for a disregarded owner. Not onto the company expenses and the personal return both. Bring the policy names.

Premiums are their own page because the double count is so ordinary.

Do my estimates share a date with a company return

While the company is disregarded, the estimate dates belong to the person. The person's estimate months are April, then June, then September, then the January payment for the year that just ended. The company bank account does not grow a second federal calendar. The figure should come from this year's closed months, not from last year's total divided by four. A shop that was quiet in the spring and loud in the fall needs that figure rebuilt. We label a forecast when the latest month is still open.

A report a state still wants is a different calendar.

The personal dates are listed here.

Do not assume a state extension moved your personal estimates, or the other way around.

What should I do in October

Look at the year you still have, close the months that are open, and decide what next January should be. October is not a fake statute.

The October page says what can still move and what cannot.

A question this list skipped belongs in the form at the bottom. A narrow question gets a sharper reply than a request for every fact about one-owner companies.