worried about not paying enough taxes

[gabster54]

SC. My husband and I have a small real estate business. It is listed as an LLC. It is just my husband and myself in this LLC. Outside of the LLC, my husband has a regular job (with taxes, i.e., SS/Fed/FICA, etc), but I just work in our business (but not listed as an employee, just co-owner). We have entered in our taxes the income that we have received from this business, after posting all we are allowed to deduct for the rentals. That income that is left over, we have been taking as part of our income. I guess I was wondering if we are supposed to categorize it in another way since we are taking it? I hope this makes sense to you all.

 

[tranquility]

Sorry, it does not.

Your LLC should be filing a return and give a K-1 to you. (And, your husband. If not, different issues.)

Your situation is probably not that complex. Go to a tax professional this year and then just switch the numbers in future years.

 

[gabster54]

Thank you for taking the time to answer. He did file a schedule E. Is this the same thing? sorry just not knowledgeable about tax stuff at all.

 

[tranquility]

Thank you for taking the time to answer. He did file a schedule E. Is this the same thing? sorry just not knowledgeable about tax stuff at all.

Because your LLC has (at least) two members, it is not a disregarded entity. It should be filing a return--probably as a partnership. You and your husband should get a K-1 from the LLC which you will report on schedule E page 2 (And, perhaps, other places on your return.). If you reported your real estate business on the front page of schedule E, rents and expenses and the like, then you did not file correctly.

 

[gabster54]

Thanks for your reply. will talk with my accountant about this as I don't see anything about a k-1