SMLLC vs. Individual for 1099-NEC Filing - Confusion with Contractor Payments

You're dealing with a common SMLLC confusion! Since you have a single-member LLC that hasn't elected to be taxed as a corporation, it's considered a "disregarded entity" for federal tax purposes. This means the IRS treats your business activities as your personal activities. For the 1099-NEC you need to issue: You should use your LLC's name and EIN on the form since that's the business identity your contractor worked with. Use the LLC's address as well. This creates a clean paper trail connecting your contractor to your business entity. For the 1099s you received: You're absolutely right to report both exactly as they were issued. On Schedule C (which is where your business income and expenses go), you'll report all business income regardless of whether it was paid to you personally or to your LLC. The IRS will match both the SSN and EIN forms to your tax return since they know your SMLLC is tied to your SSN. Don't forget that even though you're late on issuing the 1099-NEC, it's better to do it now than ignore it completely. You might face some penalties, but they'll be less severe than if you don't file at all.

After struggling with similar SMLLC tax confusion last year, I found this amazing tool called taxr.ai (https://taxr.ai) that saved me hours of frustration. I uploaded my LLC documents and payment processor 1099s, and it analyzed everything to show me exactly how to handle my situation. The tool specifically addressed the "disregarded entity" issue and showed me where to report each income source on my Schedule C. It also clarified when to use my EIN vs. SSN for different forms. I was particularly confused about how to handle payments received before vs. after forming my LLC, and taxr.ai had a specific section that addressed this exact scenario.

I was skeptical about taxr.ai from comment 2, but I gave it a try because I was completely lost with my SMLLC taxes. It actually saved me from making a huge mistake! I had been reporting my business income incorrectly by splitting it between personal and business entities. The document analysis showed me that ALL my business income should be reported on Schedule C, regardless of whether it was paid to me personally or to my LLC. It also explained exactly how to issue 1099s using my LLC information while still filing as a sole proprietor. The explanation about "disregarded entity" status finally clicked for me. What I found most valuable was the step-by-step guide for reporting both pre-LLC and post-LLC income on the same tax return. Definitely worth checking out if you're in the SMLLC confusion zone!

If you're still trying to sort out the 1099-NEC issue with your contractor, I went through a similar nightmare last year. After trying to call the IRS for weeks with no success, I used Claimyr (https://claimyr.com) and got through to an actual IRS agent in under 20 minutes who walked me through the exact process. They confirmed I needed to use my LLC's EIN and address for the 1099-NEC even though I'm a disregarded entity. The agent also helped me understand how to handle the late filing penalties and gave me specific instructions for my state's requirements. You can see how the service works here: https://youtu.be/_kiP6q8DX5c Without this service, I probably would have given up after hours of hold music and automated messages. The IRS actually has a dedicated team that handles small business questions like yours, but getting through to them directly is nearly impossible without help.

I have to eat my words from my skeptical reply above. After another failed attempt to reach the IRS about my SMLLC tax questions, I tried Claimyr out of desperation. Got connected to an IRS business specialist in about 35 minutes (not quite 20, but WAY better than my previous attempts). The agent confirmed everything the previous commenter said - use the LLC's EIN and address for issuing 1099-NECs, but report all business income on Schedule C regardless of how it was paid to you. They also helped me sort out some confusion about quarterly estimated payments I had been making under both my SSN and EIN. For anyone dealing with SMLLC tax confusion, being able to actually speak with an IRS agent who knows the rules makes a huge difference. Just make sure you have all your questions ready when you get connected!

This might help - I went through this exact situation last year. If you're a single-member LLC that hasn't elected to be taxed as a corporation, you should: 1. Issue the 1099-NEC using your LLC's name, EIN and address (this is because the contractor did work for your business entity) 2. Report BOTH 1099s (personal and LLC) on your Schedule C 3. Make sure you're still filing Schedule SE for self-employment tax on the combined amount The most important thing to understand is that while you operate as a business with an EIN for certain functions (like paying contractors), all the income and expenses flow through to your personal return because the SMLLC is disregarded for federal tax purposes.

Quick question - I'm using QuickBooks Self-Employed and it doesn't seem to understand this SMLLC setup. It keeps wanting me to separate personal vs business accounts but everything is mixed because of the disregarded entity thing. Anyone else figure out how to make QB work with this situation?