This year, I filed business taxes for the first time. I own a single-person LLC, so it was a pretty dumbed down process.
Altogether (with a pre-made P&L sheet) the process took 3 hours –approximately 45 minutes to file business taxes, and 2+ hours for personal taxes, with a lot of snack breaks in between.
Single-person LLC taxes are filed differently than multi-member LLCs. “For federal tax purposes, the single member LLC is ignored and the owner simply reports income and expenses on Schedule C of his or her 1040,” says LLC Made Easy. A married couple who jointly owns an LLC could also qualify for the single-person LLC tax process.
TurboTax charges single-person businesses $99.5 to file federal taxes via the Home and Business edition. It asks for the company’s total annual sales and expenses broken down by categories: transportation, entertainment, assets, legal and professional costs, etc.
If you own a retail company, it also asks how much the cost of your current inventory is worth and includes that in the P&L calculation, assuming that it’s future revenue.
Once all of the expenses and sales have been entered, TurboTax calculates your profit or loss, and you progress to the rest of your personal tax filings.
The process is that simple. The most time-consuming part is creating a P&L spreadsheet ahead of time and making sure TurboTax accurately reflects those totals.
If you’ve never made a profit and loss statement spreadsheet before, Inc.com has template you can download here.
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