Starting in 2022 the gift tax exclusion is $16,000 per donor in a calendar year.
In late November, IRS has still yet to process 6.5 million personal 2020 tax returns.
And it is 2.6 million amended returns behind.
IRS is behind on alot of stuff......
Including, as of 09.08.21 ....
2.8 MILLION Amended Returns have yet to be processed!
ACCOUNTING (You have TWO businesses)
• The bookstore or contracting business (example) is an operating business. Keep revenue and expenses separate from the rental business. This does not mean a separate checking account but it may be easier to maintain records. That is up to you.
o The bottom line profit is taxable for income and self-employment tax.
• The rental part is called a passive activity. Keep revenue and expenses separate from the bookstore.
o The bottom line profit is taxable for income tax but NOT self-employment.
PAYMENTS TO MEMBERS
1. Just take it. That is called a DRAW. Partners are NOT required (unlike a corporation) to DRAW according to ownership percentage. The DRAW itself is not a taxable event. The members (that’s what partners are called in an LLC – members) are taxed on the bottom line profit whether they take it (DRAW) or not.
2. There are NO W2 wages in partnership accounting.
3. If partners/members are being paid the equivalent of wages, that is called a GUARANTEED PAYMENT. That amount is deducted by the LLC as an expense. It is income taxed and self-employment taxed to the partner/member receiving the GUARANTEED PAYMENT.
• Payment for services would be a GUARANTEED PAYMENT. Deductible by the LLC and taxable to the recipient.
• Just taking money (DRAW) is not in itself a taxable event, it is just money being transferred. The LLC does not receive a tax deduction.
The opening day for filing 2020 individual returns electronically is scheduled for Monday, February 12, 2021, see IR-2021-16, which explains the February 12, 2021 start date for individual tax return filers allows the IRS time to do additional programming and testing of IRS systems following the December 27, 2020 Consolidated Appropriations Act (H.R. 133) tax law changes that provided a second round of Economic Impact Payments (EIP 2) and other benefits.