LLC Tax Preparation

Why LLC tax preparation can be confusing?

LLC tax preparation can be challenging to begin with. Limited liability company (LLC) has a unique status given by the IRS. LLC owners reserve the right to choose how the IRS treats the business for federal tax purposes. Therefore, the IRS tax classification choices require the preparation of different tax returns and bookkeeping. It depends on which option you choose in the first year of tax filing. Regardless of this consideration, however, the basic procedure for filing an LLC Tax Return can become difficult.

Also, for an LLC you want to elect how IRS treats your company. Every LLC must choose how it’ll be treated for federal tax purposes. A single-member LLC can option to be taxed as an S-corp or a sole proprietor. The multi-member can be taxed as a corporation or partnership. An LLC taxed as a single proprietorship report taxes on individual tax. Therefore, a member record all the expenses and income on Schedule C. An LLC taxed as Partnership files form 1065, and those with corporation category files form 1120. Moreover, your LLC must have a Confirmation Letter from the IRS. This letter shows the election you made for tax classification for company records.

What is an LLC tax preparation checklist?

Income

• Sales records
• Gross receipts from services or sales
• Allowances and returns
• Savings account interest (statement or 1099-INT)/ business checking
• Other income

Cost of good sold

• Total investment
• Inventory purchases
• The total dollar amount of beginning inventory
• Total dollar amounts of ending inventory
• Supplies and materials
• Items removed for individual use

What are LLC tax preparation expenses?

First of all, the general expenses include advertising, phones, the internet and computer expenses. Moreover, transportation expenses combine travel expenses, local transportation, business trip log, public transportation, tolls, and parking.

• Additionally, expenses, when you’re traveling away from home. As it happens may include:
  1. Taxi,
  2. Tips,
  3. Airfare,
  4. Hotel,
  5. Meal tips,
  6. Also, the internet connection, and much more.
• Thirdly, depreciation expenses which, include Cost & first date business use assets. Also, records for the personal use of assets, sales price, and the disposition date of any sold assets.
• fourthly, insurance expenses which as an example are:

1. 1. Business insurance
   2. Errors, and omissions
   3. As well as, casualty loss insurance.

• There are also professional and interest expenses. Interest expenses are such as:

1. 1. Business loan interest
   2. Investment interest
   3. Mortgage interest

• Professionals fees are listed such as:

1. 1. Fees for consultants
   2. Accountants
   3. Lawyers

• Furthermore, rental expense includes a combination of:

1. 1. Vehicle lease expense for business use
   2. Office space rent too

• The office supplies expenses are paper, staples and other consumables.
• Last but not least, if your office is in your home, expenses that matter can be beneficial. Because it may include hours, square footage of the office space, total square footage of the home. Also, utilities, rent paid, renter’s or homeowner’s insurance, the cost of the home can be deducted.

Contact Green Tree Tax

Green Tree Tax is ready to answer all your complex tax questions. We’re the leading tax preparation compoany in Houston, TX!

Not only, we have a team of highly experienced professionals offering quality services, but also we receive training every year. To sum up, we offer exclusive tax preparation services at an irresistible price.