Single Member LLC & Sole Prop doing the same activity

[TomJ]

Client does some consulting work as a sole proprietor and some through his Single-Member LLC. It is the exact same work, just through different 1099 vendors. One Schedule C or two? If only one (which is what I'd normally do for related activities), do I report the SMLLC tax id on the Sch C? Business is in PA, in case it matters.

[terryats]

Single member LLCs use their SS on schedule C not LLCs EIN. See IRS instructions for "single member LLCs". I would do one schedule C for the same work, with owners SS

[TomJ]

Instructions for Sch C, line D read: "Single-member LLCs. If you are the sole owner of an LLC that is not treated as a separate entity for federal income tax purposes, enter on line D the EIN that was issued to the LLC (in the LLC's legal name) for a qualified retirement plan, to file employment, excise, alcohol, tobacco, or firearms returns, or as a payer of gambling winnings. If you do not have such an EIN, leave line D blank." In this case, the taxpayer's SMLLC has an EIN so he should use it on Schedule C. The sole prop portion of his business does not have an EIN, so the EIN should be blank. And, he should use one Sch C. for both sole prop and SMLLC purposes b/c it's the same activity. Seems like an unanswerable question (which is why I asked it). I will probably just leave the EIN blank if that doesn't cause an e-file issue. Blank is less wrong than filled in and wrong, right?

[TaxGuyBill]

If the Schedule C does not have "qualified retirement plan, to file employment, excise, alcohol, tobacco, or firearms returns, or as a payer of gambling winnings", it does not matter if the EIN is on there or not.

For tax purposes, it is okay to put it all onto one Schedule C. However, for legal protection purposes (the purpose of a Single Member LLC), it is possible that could 'pierce the veil' of protection, so it may be a good idea to put it on two separate Schedule Cs.

I think Terryats was referring to filling out a W-4 for purposes of receiving a 1099. For that purpose, you do NOT use the LLCs EIN. You use either EIN or SSN of the Individual person.

[TomJ]

TGB - this makes a lot of sense. And I agree on a W-9 (not W-4), you use your SSN not the SMLLC EIN so that the 1099 is linked to your personal tax return. I've seen many clients mess this up.

Thanks everyone for the feedback.