In this video I'm going to be answering your questions such as do I need to file
a tax return for a business with no activity meaning it didn't have any income or expenses
what type of tax return do i need to file if I'm a sole proprietor or maybe
I'm being taxed as a single member llc a multi-member llc and s-corp a c-corp
when is my tax return due based on those different entities i just mentioned
and also what are the penalties if i accidentally file late so if this is your first time watching
my name is Navi Maraj I'm a CPA who helps in particular real estate professionals that's real
estate agents and brokers around the country save thousands of dollars in taxes but this
video is for all business owners regardless of what type of business activity you perform so um
let me just say this real quick do go ahead and subscribe at this point in time because
all of my videos are going to be like this one where I'm either educating you or teaching you
a tax strategy to save you thousands of dollars in taxes so with that said uh let's go ahead and
transition to the whiteboard behind me so let me let me kind of start off explaining what I've got
listed here so across the top of the whiteboard I've got your entity types and sorry entity type
tax classification that means how this entity type is going to be taxed given its tax this way
what tax return do i need to file and uh do i even need to file a return based on if i had you
know what level of activity i had and then when is the due date for this particular tax return right
and then in the rows here I've got the different uh types of entities that we're going to talk
about during the video okay so let's start from the top let's say you formed a single member llc
so you went to your state you filed an llc and there's just one member which is yourself
this is also going to apply if you're just you know let's pretend your name is john doe
and you're just doing business as john doe or you've filed what's called like a fictitious
name agreement or a trade name or a it could be called doing business as if you filed any
of those then you're going to be taxed as a sole proprietorship that is your tax classification
all right so what type of tax return does someone who's taxed as a sole proprietorship file
they will file a schedule c which is a separate schedule that's part of your individual tax return
that's what itr stands for in this example all right so single member llc is taxed as a sole
proprietorship and where does those taxes get filed it gets filed on your schedule c which is
part of your individual tax return okay now do i even need to file a return let's say
i just started this business there wasn't much activity well the sort of general rule is if
you have profit and I'm defining profit here as you've got your revenue you've got some expenses
if you've got profit greater than or equal to 400 the answer is yes you need to file a tax return
now if you didn't have any activity let's say you formed a single member llc
you had no income no expenses then you don't have to file a tax return also i want to be clear here
if you've got expenses and you've got you know you don't have a profit let's say you have 800 in
losses you probably want to file a tax return to take advantage of those losses to see if they can
offset any other income that you have all right now when is your individual tax return due it's
due on April 15th just as you probably suspected it's due all right so let's move on to the next
category so next we have the multi-member llc so this is if you've gone to your state you formed an
llc and you're on it and there's someone else on it right and for this i'm going to get to this in
a second but i'm going to say for now um it could be your spouse or it could be someone else right
this type of entity is uh taxed as a partnership okay so you're gonna file a partnership tax
return i know that might be news to some of you watching this forum if you have a multi-member llc
then it'll be taxed as a partnership what does that mean that means you have to file a separate
tax return it's called it's form 1065. it's called an informational tax return and that tax return
is due on march 15th before i get to the due date though
do i need to file this partnership tax return well the only time you don't file a partnership
tax return is if you had zero income and you had zero expenses all right so if you had no business
activity no income no expenses then you don't have to file this return if you have you know 100 bucks
of revenue 100 bucks inspect expenses you need to file this partnership form 1065 tax return
and it's due march 15th okay one month prior to when your individual tax return is due
all right what do i have here in this sort of purple color this says multi-member llc
but specifically it's a husband and wife and it's in a community property state all right so
if it's a husband and a wife team and it's not in a community property state then you
follow this guideline here in the green but if it's a multi-member llc and i'm the partner
sorry yeah i'm a partner and so is my spouse and i live in a community property state then the way
this is actually taxed is as a sole proprietorship okay that might be news to you even if you're a
tax preparer watching this or if you're a new business owner that's probably definitely news
to you it's taxed as a sole proprietorship and so the tax return that you complete is schedule c
same as it was here but this mfjtr that's just saying it's on your married filing jointly tax
return right now do i need to file a tax return the the rules is just like it was up here
yes if you have a profit greater than or equal to 400 you want to file a uh schedule c tax return
if not um if it's less than 400 then technically you could get away with it but i'm just saying
it's probably a good idea to file if you've got you know income and expenses um and you've got
a loss for sure you probably want to file that return that's due again april 15th just like it
was up here okay what's next what's next is a c corporation now this is not likely that
you form this entity this is usually for larger corporations but if you filed a corporation in
your state then your tax classification is also called a c corp all right and the tax return due
for a c corporation is the 1120 all right so it's a separate tax return than that of your individual
tax return okay and do you need to file a return the answer here is yes even if you had zero income
zero expenses the irs is still expecting a tax return for this it might be filled with zeros
but you still need to file it and when is it due it's actually due on April 15th okay so that
is the c corporation return all right last section here now what i'm trying to um sort of depict here
is that an s corporation is not an entity type it's not a legal entity type right so in order
to be taxed as an s-corporation you would either either have to have to have a single member llc
or a multi-member lrc or a c corporation and you can fill out paperwork with the irs to have this
type of entity taxed as an s corporation so if you filled out that paperwork or your accountant did
or you went through legalzoom or something like that and you made the s corp election then then
you have to file the 1120s tax return okay that's the type of tax return that you have to complete
do you need to file a return if you didn't have any business activity yes okay if you're
a corporation specifically s corporation or c corporation even if it's all zeros no income
no expenses you need to file that tax return okay when is the s corporation tax return due it's due
march 15th so i want you to realize here what's going on with the due dates okay let's talk about
late fees as it relates to these due dates if you're learning for the first time here that your
partnership tax return or your s corporation tax return is due march 15th and not April 15th and
march 15th has already passed well unfortunately the late fee from the irs is going to be 200
per shareholder or 200 per partner per month all right so using the example of a multi-member llc
uh if you even missed this by one month it's two partners one meant one month went by so
you're at a 400 late fee so please uh be careful and be cognizant of those due dates all right
uh real quick if you were you know listening to this video for the first time and this
was a little bit too advanced for you and you're wondering like you know what is an llc
when would i be one what's a c corp you know when should i be an s corp and by the way an
s corp can probably save you thousands of dollars in taxes um you know don't worry I've got a video
explaining the legal and tax differences which is probably going to be popping up here shortly
if you're watching on YouTube but if you're not watching on YouTube then you can just visit my
website it's navimarajcpa.com and my complete video library is there for free for you to binge
on and learn and also implement tax strategies that you may not be aware of that could save
you thousands of dollars in taxes so I hope this video was helpful and you receive value out of it
if so please again consider subscribing and sharing this video with a fellow entrepreneur
so that they can learn and they can save thousands of dollars in taxes as well
thanks so much for watching and I'll see you in the next video