All Forum Posts by: Jason Krejci

Hey Matthew, I'm not sure I understand what you mean by using your ssn to set up an EIN but I think I get the gist. You generally get an EIN when you have some sort of business entity, be it a corporation, partnership or an LLC. The EIN is used for IRS purposes like filing a corporate tax return. LLCs, corps and the like are state created entities so if you are wanting an LLC it would be created at the state level. You would then request and EIN and specify the type of entity that you are for federal tax purposes.

In your example you want an LLC with a simple filing status and to split profits 50/50. The most simple thing is likely a muliti member LLC. When you apply for your EIN and designate it is a multi member LLC, you default to a federal filing status as a partnership. In a partnership, the IRS requires a form 1065 filed on an annual basis. This is a non taxable return that reports thr partnership income, expenses, etc. You and your father would then receive K-1s at the end of the year reporting your share of the profits. The K-1 income will then be reported on your form 1040.

I know this is a long winded answer, I hope it helps. You will also need to know what is required for state filings in the state you operate in. It is best to consult with a CPA/attorney before moving forward. 

Hey Reese, I'm not an accountant but I do work for the IRS and deal mainly with business compliance issues. Your federal filing requirement depends on if you made an entity classification election on form 8832 or not. For example you could elect to be treated as an S corporation for tax purposes on form 8832. If you made no election you are subject to the default classification. A single member LLC defaults to a disregarded entity which means you include your LLC income and losses directly on your personal tax return. A multi member LLC defaults to a partnership classification meaning you would need to file a 1065 which is a non-taxable return but subject to a penalty if not filed timely. Hope this helps.

Jason