LLC Tax ReturnThree lines, then a decision

Sales should resemble the year you ran

The receipts line is the one owners feel in their stomach. If the shop was busy and the line is quiet, or the shop was quiet and the line is busy, stop. The cause might be a deposit that was really a transfer, a refund booked as income, or a month that never got named.

You do not need the general ledger in your head. You need the rough shape. A year you remember as flat should not arrive looking like a boom, and a year of a second location should not arrive looking like the first year. The feeling is allowed to be imprecise. The direction is not.

Card batches and cash drops are where this line goes wrong for a shop. A batch that landed in the bank on the first of the next month still belongs to the month of the sales. Leaving it in the later month makes both months lie, and the return inherits the lie.

Money you took should sit where the form expects

Draws, distributions, and wages are three different events. A draw reduces what the company owes you or what you have invested. A distribution, on some forms, is reported to you and may or may not be taxed as it comes out. Wages are a payday, with filings behind them. The form in your hand has a place for each, and using the wrong place changes the promise you are about to sign.

If you paid yourself by moving money and there was never a payday, say so. On some treatments that is exactly right. On an S election it is a problem, because an owner who works in the company is expected to take reasonable pay through a provider. We connect that provider. You run it. The return should use the wage forms, not a number typed in April.

Look at the line that claims to be your pay or your draw and ask if you remember that money arriving. Owners sign returns that show wages they never received, because the software needed a figure. That figure becomes a story you have to defend. We would rather the story and the bank match.

Your name and your share

The ownership line is dull until it is wrong. A former partner still listed, a spouse added from memory, a percentage that does not add to the whole. Those errors change who is responsible for the profit and who receives a K-1. They are visible on page one or on the schedule of owners, and they take one minute to check.

The address and the year belong in the same glance. A return for the prior year that still shows an old shop location is a clue that the file was copied forward and not read. Copied files are how a dead loan, a sold truck, and a closed account survive onto a signature page.

If all three lines agree with the year you lived, the signature is a calmer act. If one of them does not, you have a specific question, which is a better thing to bring to a call than a general dread. Write the line that bothers you in the form. We will start there.

Which line looks wrong