Form 1065 or Schedule C

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MelvinBar
MelvinBar Member Newcomer

My wife and I started a virtual bookkeeping service in July 2023 in Connecticut. I am the managing member and have not drawn income from this business minus utilities, of which 10% is for home office expenses. We file as married filing jointly. My question: Do Form 1065 and Form CT-1065 need to be filed, or can we use Schedule C since we file jointly and no income is taken out?

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  • MatthewD
    MatthewD FreeTaxUSA Team
    edited November 2023 Answer ✓
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    Hi MelvinBar,

    Being registered as an LLC with CT, will change your federal filing requirement. You cannot file a federal return as a "Qualified Joint Venture" using a Schedule C for each spouse. You will need to use the Form 1065.

    See "A Business Owned and Operated by the Spouses through a Limited Liability Company Does Not Qualify for the Election" at this link.

    The state of Connecticut requires an annual report filing for an LLC. For more information about the CT filing requirement see this FAQ, "What is an annual report and how do I file?" on the FAQ Business Entities page of CT.gov.

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