Discussion:Single member llc
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Discussion Forum Index --> Basic Tax Questions --> Single member llc
Discussion Forum Index --> Tax Questions --> Single member llc
| 25 January 2008 | |
| single member llc has spouse do work for them. In the llc management agreement the spouse is the manager but there is no cash to pay him so the "employee" is working free right now. The spouse is doing marketing, deliveries, etc are the business expenses that the spourse incures business deductions for the llc even though the spouse is not getting paid?
Neil | |
| 25 January 2008 | |
| Sounds like they have a partnership to me. Can file 2 schedule Cs. | |
| 25 January 2008 | |
| They do not have a partnership because the llc agreement is a single member llc and the spouse is going to be an employee but the llc does not have any cash yet to pay the employee but is doing work for the llc and having expenses. Can the llc reimburse the spouse and/or pay for the expenses? | |
| 25 January 2008 | |
| the llc could reimburse the spouse for ordinary and necessary business expenses.
If the spouse wants to get paid for time it would be wages. | |
| 25 January 2008 | |
| my issue is that the spouse is neither being paid as and employee so how can any of the expenses be business vs personal since they are not a member of the llc but designated in the llc documents as the manager?? It seems to me that this is no different than me reimbursing a neighbor taking a potential client out to lunch and charging it to the business credit card or a neighbor running deliveries for the buisiness and having the business pay for the gas. Is this legal OK??? | |
| 25 January 2008 | |
| If the expenses are ordinary and necessary, and they are clearly related to the business of the LLC, then they should be deductible. | |
| 26 January 2008 | |
| so you are saying that if husband (or neighbor), not paid, not employee takes a person out to lunch to promote business for me I can pay for the lunch and deduct it as an ordinary and necessary business expense even though I was not there and I have no staff or employees?
Neil | |
Manuelhnavarro (talk|edits) said: | 26 January 2008 |
| hello i think that the spouse needs to get pay even though
the llc is going -00 under she would be an employee and the llc will have a lost on schedule Cz othere ways you can't clam the spouse time as ordinary and necessary buss. expense | |
Manuelhnavarro (talk|edits) said: | 26 January 2008 |
| employees generally must complete form 2106 employees business
expenses, and itenize deductions on schedule A,itemized; how are they fieling ( M F J ) OR( M F S ?? ) WITH ONE OR TWO SCHEDULE Cs ??? | |
| 26 January 2008 | |
| 2106 would assume that employer doesn't have reimbursement plan and that the expenses weren't directly paid by the company but by the employee. | |
| 26 January 2008 | |
| I think all are missing the point. spouse is not getting paid but is designated in the LLC agreement as the manager becuase there is no cash to pay but takes prospective customers and customes to lunch. Is the meal, if the llc reimburses the spouse a business deduction since the llc member was not present and the spouse is not yet getting paid | |
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