Major Tax Deadline 3.15 for LLCs & S-Corp |LIVE/Q&A

Welcome, ladies and gentlemen, to another live today with best selling author, America's small business tax lawyer, real estate investor and YouTube personality, Mark J. Koehler.

We're here. Thank you, everybody. I called this live this morning because we need to talk about the important tax deadline today. I was getting texts last night from family and friends regarding what to do with my LLC or my S corp. Do I need to file an extension? What happens if I don't? This won't be a live, a long live broadcast. I think we can cover this in the next 20, 25 minutes. But people, this is very, very important. It can cost you if you don't handle this properly. So I'm going to give the rule here and then I want you to ask your questions. I'm all yours. If you haven't been able to get a hold of your accountant or your lawyer or your enrolled agent, your cpa, whoever it is, you can take care of this yourself today. So what we want to do is give you the 411 clear answers on your duties to save on any penalties for missing the deadline. Okay, so here's the rule. If you have a single member LLC that's 100% owned LLC by you, you could be the member, the manager, both, that's fine. But it's 100% owned by you. If you're married, it's owned by one of you, it still could be marital property, whatever. It could still be owned by your trust, but we reported as owned by one person on your tax return, that's called a single member llc. There's no tax return due, there's no deadline you're going to miss. Today that LLC is reported on your 1040 and the deadline for your 1040 extension is April 18th. So if you have a single member LLC that owns a rental property, you're running a business, that single member LLC does not need to file an extension. You're just going to deal with it on your personal return next month. However, if you've made an S election and your LLC is taxed as an S corp, you do not have an LLC anymore. It's now an S corporation. I'll come to those in a minute. So if you have an LLC taxed as an S corp, today's deadline matters. But again, a single member, 100% owned LLC, rentals business, whatever the hell, driving Uber, Realtor, electrician, landscaper, whatever, and you own it, and you have not made an S election, which is probably a bad decision. We'll come back. That's a different show. There's no extension due today. Okay. If you have an LLC that's owned by two or more people, maybe it's you and your spouse. If you're married and for some reason you made it a two member LLC and you've been filing a 1065. A 1065 is a jointly owned LLC. If you have a jointly owned LLC with two or more members, then you have to file your tax return today unless you file an extension which gives you six months to file the tax return. There's no tax due today. No tax due. But if you don't file the extension, the penalty is $210 per member per month. Up to six months. It adds up quick. It is brutal and it's hard to get out of. Some accountants may say it's easy, you got to write a letter and all this, but you're paying us to write that letter. So you don't want to deal with it. So you have to file that extension. The form is form number 7004. You can Google it, download it from the IRS, stamp it, mail it, there's some online services that you can find out there to file it for you. Fine, whatever, but just make sure the 7004 and you're going to check the box for a multi member partnership llc. You're going to check the right box on there. Read the instructions. It's not that hard people. You can do this. Send it in, today's the deadline or the penalty is $210 per month per member. Okay, now get your questions down below. James is going to be rattling those off at me real quick here. For those of you that have an S corporation that's not an S corp like you might have gotten Vegas at one time in your life, dirty rotten scoundrel. This is an S Corp. S corporation. S as in small corporation. If you have an S Corporation Inc. Or an LLC taxed as an S Corp, I don't care how many members there are. You can have one, you can have 50. Doesn't matter if you have an S corporation, you have to file your tax return today or file an extension which gives you six months. Believe it or not, you're going to use the same form 7004, but you're going to check a different box. You're going to say I am an S Corporation. And people on this form you're going to put the EIN electronic identification number for your LLC or S Corp. Now if some of you set up an entity last year, an LLC or an S corp and all you have is one Sheet of paper and a train wreck. Please call the law firm James. Make sure that's in the description. Kkoslawyers.com and we have a special this month. This is a time of year to get your entity cleaned up. Let's get all the pieces and parts you're supposed to have because you don't have protection until you do an important disclaimer. By the way, any of those notes on the Facebook feed from someone trying to sell you Bitcoin? They are not me. Do not listen to anybody trying to get you to spend any money on any stupid bot scam. Focus on the questions you have and listen to me. I will respond, but do not click on any links in there from the scammers. Okay, so we've got our LLCs, we have our S Corps. They're due today unless you file the form 7400. Last point. My daughter Sydney. I've got two. I've got. I love my kids. And I had two questions from two different children in the last week. Sydney, who's my realtor, she's in Orange County, California. If you're looking for a home down there, she's amazing. She's at Sotheby's. She called me last night and says, hey, if I. She has an S Corp. And she's like, what about all my expenses for last year? What should I start doing once I file my extension? And I said, start combing through your bank accounts, combing through your credit cards, and building an Excel spreadsheet of all your expenses. And she goes, but wouldn't it be better if I did QuickBooks? And I said, sid, I love you. And I said, yes, let's get all of those bank statements and credit card accounts downloaded into QuickBooks and let's start doing it right. And so you can kind of go down and dirty with a spreadsheet, or you can get going with QuickBooks, my tax advisor network, which is at markjkohler.com, you can click on the network and find an accountant around the country that can help you with your bookkeeping and get your tax return filed. But there's no rush because you're going to file a freaking extension today, right? So you're good. I told Sydney that. I'm like, don't worry. Start digging up your expenses. And she goes, when did I do it? Just in the evening when I'm watching a movie. I said, yeah, get a bowl of popcorn. Get some Diet Coke. Nothing stronger than Diet Coke, because then you're going to lose expenses and Then start working on your books. My son Dylan, who runs a marketing company, I love him. House of Strategies. He helps clients around the country manage their ad spend on different platforms and various other marketing strategies. Dylan said, should I make my wife the owner of my LLC so I can write off her expenses? And I said, no. A single member LLC is fine for you. You're still going to have your wife on the board of advisors for your llc. That's why some of you need a cleanup. If you don't have that feature on your llc and she doesn't need to be an owner, you can still write off all the expenses related to her help and you can get that LLC going and. And making money, and then we'll convert it to an S corp when the time's right. He's like, sweet. So these are common questions. I want to just get those out for you. We've got about 10 or 15 more minutes here because we're going live on another platform here at the bottom of the hour. So James, hit me with some of these questions from our wonderful followers.

This question is from Jeff. I'm a single person S corp. My accountant died, and I was not able to get my W2. I took 30k of withdrawal this year. Can I still file? It says Phil, but I think he meant to say file with no W2 and just show withdrawal as a loan.

And what's his first name, you said?

Jeff.

Jeff. Thank you, James. I had Jeff, Jeff, and James mixed up for a minute. Jeff, yes and no. Okay, listen, everybody. Jeff had an S corp. He was supposed to do a payroll report back in January, two and a half months ago. Sounds like his accountant died. I'm so sorry. My condolences. He missed that deadline. That's okay. A good tax advisor can go back and attribute payroll to that S corporation as needed to make sure you save on the F word. Fica, Social Security, and Medicare. That's the reason why you did the S corp. So don't worry if you miss the W2. But number two, no, you do not do a freaking loan. People in your businesses, you never loan yourself money. That's a C corp structure for the scam artists to sell you when they try to get you into a C corp in Nevada. Don't go there. Don't listen. I've written books on it. It's a scam. It's worthless. Stay away from the C corp and the loan strategy. It's a ticking time bomb. So in your S corp, Jeff, get with one of my certified tax advisors. There's no rush. File your extension today, file your personal extension next month. Get with an advisor. They are all trained by me on how to attribute some payroll for last year. You don't need the W2. You're good. Don't stress today. Just get the 7004 off. Next question.

James, Therese just wanted to thank you first to say thank you for the heads up and the alert. It saved her as far as a file extension. So it's great to listen to those posts. So this question's from DaVinci. It's real simple. Some just may not know the answer. If you have a multi member LLC that has not had any activity, income, expenses, et cetera, all year, do you still need to file taxes? Super important.

Yes. Yes. I am so glad he asked. So everybody, let me repeat that. If you have a multi member llc, multiple partners, and you filed for a tax ID number last year and some articles, you may go, well, I don't even have the operating agreement or I don't have all the pieces, but you went and freaking got a tax ID number and you filed that LLC with the state. The IRS is expecting a letter. You can't go on a date and have a great conversation and say you're here and then ghost that boyfriend or girlfriend. You're going to get your cars keyed, right? So the irs, they're waiting for a phone call, they're like what the hell is going on? You said you had an LLC and now you ghosted us. Not good. So you do need to file an extension and a tax return, but it says zero. Most accounts are going to knock it out for a couple hundred bucks and just zero it out. So when you do have activity, you're primed and ready to go. But if you do not File an extension, $210 per month per member until you do file the return, get it filed, file the extension today, get with a certified advisor, get with your accountant, whoever it is, and say get that return filed and zero activity return. Now for those of you that have an LLC that single member owned and no activity, you're fine. Remember, that goes on your 1040 next month. No worries. Next question.

James, next question is from Brett. How far back can you backdate an LLC to S Corp? Sorry if you already said this, I just joined the chat.

Oh, it's cool. Great question. Depending on your situation and you how aggressive you want to be, you could still probably backdate it to the beginning of last year and then attribute some payroll, something I talked about a few minutes ago to Your s Corp. The IRS would prefer that you would have ran a W2 two and a half months ago. So we were doing s elections two months ago and getting payroll done for clients. All of my advisors knew exactly what to do. Now you're kind of working outside the box. I'm not saying I wouldn't do it, but you got to make sure you have an advisor that knows what the hell they're doing. So if you made more than any of you out there that had an S corp that made more than 40 or 50 grand and you didn't run payroll, or you had an LLC and you didn't make your selection last year and you made more than four, fifty, forty or fifty grand, you are in harm's way. We have got to get you with an advisor, convert you to an S corp, probably back in some payroll through, we call it kind of a nominee income payroll through a schedule C. Keeps the IRS happy the first year and then you got to be Johnny on the spot moving forward. And getting a good advisor will help you do that so not all is lost. Get with an advisor. File your freaking A. You got to file the extension today and the 2553. Okay, I'm just going to say this. What you really need to do is file the 2553 and the 7004 today. You could do it yourself, but I would recommend you get with a service and get some help there. Our office, we can't do it or slammed. But there might be some online services you can do that. There's another form you should file with that. And that's going to be the 8832. So take note. You're going to file the 8832, the 2553 and the 7004. You're going to backdate the 2553 to the first of the year. But you have to. I'll do a revenue ruling. You might be out 210 bucks with a penalty on this. I would get with one of my certified advisors because I don't think you're going to be able to pull off. See, here's the thing. How can you do an extension for an entity that's not even an S Corp yet? See what I mean? So you know what I'd probably do? Here's what I'd do. File your extension. If worst case scenario, you're out $210 for the penalty for one month and you're gonna save more taxes than that. Do this. File the 7004. Check the box that you're an S corp, send it in. Then in the next month, get the S election done retroactively and do it the right way. Cause to do it retroactively, you have to attach a special letter and a revenue ruling. You can't do that yourself. We charge 200 bucks at the law firm. Call the law firm, get the selection done right. Talk to Christy Rice. Christy Rice is my business department paralegal manager. She'll hook you up. So, man, you guys are getting the real deal here, man. We're going to answer these damn questions. James. Next question.

Next question is from Carlos. Thanks for asking. Have a four member partnership made? Ly already filed a 1065 for 2022. We elected S corp status for 2023. However, I recently heard we should stay as a partnership and each of us create s corpse. What's your thoughts?

Hell, yeah. The problem now is you have to do an election revocation, which is not easy either. Here's what I'd recommend. But it's going to save you guys so much in taxes.

He said. Should I. Should I revoke the S Corp status and create S Corps for each partner and have those partners be S corps on that 1065 return?

Okay, everybody, listen. This is good for everybody. The 1065 for. What's his first name again? First name. Help me out.

Carlos.

Carlos. Okay, Carlos, your 1065 for 2022 is done. Water under the bridge. You're good. What you need to do is a cleanup on that LLC now. Make S Corps for the four partners, get the S Corps on the operating agreement. You're going to have to redo the LLC book, which is fine. And I'm going to give the attorney to work with in my office who knows S Corp revocations backwards and forwards. Then you're going to do that s election revocation for January 1st that you already jacked up. So let's get the revocation done, get the LLC cleaned up, get everybody's S Corps in place for 2023. Don't worry about 22. Water under the bridge. The attorney to talk to in my office is Kevin Kennedy. Brilliant, great guy. He's out of my Phoenix office. You can call and make an appointment with him and say we need a cleanup and we need the S election revoked and some 4s corps. And he'll do a joint call with your whole team, your whole partners, try and save you some money, get the whole package done. That's how attorneys should do it. And we love to be fun, good attorneys. James.

Next question. Is from Billy. Can you write off crypto losses for the year? I had 8,500 in losses.

If you had crypto losses last year, people, you should be able to write them off. It depends on your situation. How many in losses? That's a separate topic. I have got videos on this, on my YouTube, on the the FTX, the Celsius, the Voyager and losses and blah, blah, blah. Please go watch those videos outside of the scope. Today's deadline. But yes, you should be able to. It depends on your situation though. Next question.

James, this one's from Catherine. I am a Las Vegas real estate agent. They will only allow us to be paid as LLC or PC in Nevada. The worst thing, we have to use our full name of the license. So no privacy. What can I do?

Okay, first name again. I got to write down their names.

Catherine.

I feel bad.

I always have to have Catherine.

Catherine.

And she also said I can't do an S corp. I have hired your company to help me, but hate having an llc. Confusing.

Okay, Catherine, if you've hired our company to help you. Yeah. Okay, first of all, Catherine, what you're doing in Nevada is not a bad thing. You're an LLC or a PC. Guess what? A PC is a corporation. You're okay and your name should be on the company. It's okay. It's not what holds your assets. Katherine, you got to do a trifecta with one of my attorneys. The attorneys are going to show you that your LLC with your name on it is perfect. And it can be an S election. The state of Nevada has no clue it's an S election. They don't care. And if they 1099 you personally, we're going to push it through your S corp. Anyway. If you've hired my company to help you solve this, this should not be an issue. James, you put my personal email in there and if she says, well, I talked to so and so and they said something different, I want to hear about it. My attorneys know this rule backwards and forwards. You're doing the right thing. You're going to be. You're going to have an S corp. You're going to be saving taxes in Nevada. Sorry, Nevada doesn't have state tax, but you're going to be saving on your federal and your FICA while you're a realtor in Nevada. Keep the LLC the way you is. Don't worry about privacy. My corporation is Mark J. Kohler, Inc. Marc J. Kohler. Come. I want to sell you services. I want to sell you product. I want my Name out there. You want to find what entity owns my rental property? Good luck. See, asset protection and privacy is for my assets, for my business. I want the world to know. Come spend money with me. Who's got my money? Give it to me. I want it. Let's help you. So, Katherine, you're doing the right thing. Get with one of my lawyers. If you're like, well, if you. This is for all of you out there. Sometimes this happens. Clients are like, well, Mark, I've been a client and I called your law firm and da, da, da. I'm like, okay. I look up their name, they called the law firm, they didn't pay for a whole freaking consultation with the attorneys. They didn't pay to do the whole plan. But then they think that we're just going to do something on a 15 minute call. That's not going to happen. You're going to have to spend sometimes $1,000 people to save 10,000. It's okay. We want to be your tax lawyer for years to come. We're not going to take advantage of that. And if you have a problem, you freaking email me. But everybody, I'm not saying this is Catherine, but if you call the firm, you're going to pay and we're going to save you. I had a freaking review. I'm kind of pissed about this. I had a review on Yelp that I saw last week, though. Someone just goes and rants. I called the Kohler's law firm and they wanted to charge me this and this and they were so expensive and da, da, da, da, da, da. They won't even talk to me. And da, da, da. And then I come to find out at the end, he didn't even pay for anything. He just called and expected a free consultation. Are you kidding me? We don't do freaking free consultations. We save you freaking money, but we're not going to charge you 20 grand to do it. We're going to save you five, 10 times whatever you pay us, but you're going to pay and that's okay. You get us. You get what you pay for, people. So if you call my office, we're going to tell you your options, here's the price, and here's how we're going to save you. Please do it, Kathryn. We'll take care of you. So I want to find out what's going on. James, next question.

I think we got time for one or two more questions. This is a joy. I didn't do any of these as a realtor. I have to file bankruptcy. I have not done anything as a realtor. I owe over $100,000. I have a tax lien. Now I have to file for bankruptcy. I'm so embarrassed even saying this. How do I start? What are my first steps? I guess she's saying she hasn't made anything as a realtor and owes over a hundred thousand in taxes.

Well, here's the thing. First of all, I want to say this to Joy. I am so sorry. If any of you out there are over age 30 and you've owned a business, you know, there's lean years and it's tough. I've had to do my own debt snowballs. I've had been on a payment plan with the IRS before. It's tough out there. Joy, don't you beat yourself up, girl. And you wake up every day and you freakin keep trying. Don't you give up the realtor occupation. The industry of real estate is a phenomenal industry and it's a great career. Don't you give up on this now. Little confused. You say I owe the irs, but I didn't make any money as a realtor. If you didn't make any money, you wouldn't be owing the irs. Number two, you cannot bankrupt out of IRS debt. Or I should say it is very, very difficult. So if some bankruptcy attorney is trying to sell you on bankruptcy, get a second or third opinion. If you owe the irs, get on a freaking payment plan and let's rebuild your business. You may have other debts and that's why you're claiming bankruptcy. Of course Joy's not telling us the whole story, but everybody listen to this. If you go to a knee surgeon and ask for help with your knee, what do you think they might recommend surgery? If you go to a LASIK center and go, do I need Lasik, what do you think they're going to sell you Lasik? If you go to a bankruptcy attorney and go, I think I might need bankruptcy, what do you think they're going to sell you bankruptcy? Joy, get some other opinions. Talk to some financial wisdom people. Get some mentors. Call our office too as well. You can dig yourself out of this hole. It doesn't mean you have to claim bankruptcy. All right, we got time for one more question. And you won't believe this. The infamous Matt Sorenson just walked into the street.

Maybe Matt can answer this question. What's up, Matt?

You can answer a question. I don't know. That's not now. Matt can't hear me, so give me a second. I'M going to have to read. Tell him the question. You're going to tell me in my ear. Matt, people wrote the book, the Self Directed IRA Handbook. I know it's kind of a dry read. If you can't sleep at night, you. You know, it's pretty good, I guess, but not as good as my book over on this side.

But let's look at the Amazon ratings.

What are you rated higher?

I mean, I'm pretty confident in that, but.

Well, we're gonna have to look that up. We have to put some money down on that. All right, glad to have Matt Sorenson jumping. He's going live on another podcast here in two minutes. James, what's the question? And I'll repeat it here for Matt.

Quick question. We have an S corp and have a building on the s Corp. About 1.5 million worth on the building. How do we remove the building out of our S corp for passive income?

Anything. All right, well, Matt, you just got a hard question. I feel like James, he just freaking threw you a hard ball. Yeah, we don't get much time to

hang out, so I got to hit him hard.

Yeah, you got to hit them hard. What's their first name on that question again?

That's Pablo.

Pablo. Okay. Pablo has an S corporation.

Okay, Pablo, this is about money laundering.

We cover money laundering all the time. All right. Okay, Pablo says he has a S corporation with a building in it worth $1.5 million. I might have to provide some assistance to Matt on this question because it's a tricky one. And he goes, how do we get the building out of our S corp? Because everybody, you don't want real assets in your S corp. We want. That's your operational area. We want buildings on the other side of your trifecta over in your llc.

Any thoughts on this passive income? Question mark.

Okay, Pablo, you're doing it wrong. And this is for everybody. Do not put real estate in an S corporation. Because what Pablo's gonna have to do to get this out of the S corporation is basically have a sale. The gain that you already have in this property, to transfer it out of this S Corporation, you're gonna have to declare a sale and pay tax.

Yeah, I mean, and now Pablo wants passive income. That's great. You can. You're only gonna have some passive income.

You also have some loss limitations from an S corporation, too.

Yeah, yeah.

And I don't know your situation, all the other losses. But there's passive loss limitations with an escort. There's reasons why every CPA tax Lawyer person that really does this every day, say, do not put real estate.

Yeah, and I know you don't want us just to beat you up, Pablo, and give you some solutions. Here's your solution. You got to get some consultations, some tax lawyers, and see what your options are. A lot of it's going to depend on what you bought it for, what your basis is, how long you've had it in the S corp. What's the built in gain? Could we do a revocation on the S Corp? What else are you doing in the S Corp? Do we want to transfer it out? Maybe we leave it there and you're going to sell it down the road anyway. Your 1031 exchange opportunities are going to suck, but maybe you go with an opportunity zone. We got some options, but this is not the place for it. Pablo, get with again. I kind of like and I recommended Kevin Kennedy earlier. I'm going to go with Devin Muns. Devin Muns is one of our senior attorneys at the law firm. He's fantastic. He knows this topic very well. It's called Big built in gains. You got to get around the built in gains problem here. Pablo, call the law firm. Contact information below. Everybody, thank you for being here. Matt, thanks for joining us for the last two minutes.

Yeah.

All right, we got some music rolling. Everybody, Everybody. We'll be here every week answering your questions. Get out there, file your extension, get to my website. Hope to see you around. Thanks everyone. Live the dream.