Closing LLC in Virginia within 1 year

Hi,

I have been working full time for long but my wife never worked before and we have been filing "Married filing jointly" since last year (2007).

But in 2008, around Feb my wife opened a single owner LLC in Virginia to get some HR consultancy work. Basically she got a tie with a HR company that if she places anybody successfully, she will get one time commission on that. Because of the kind of work we thought of starting a LLC instead of sole prop. She got separate EIN for single member LLC and certificate of LLC from VA state. She opened a business a/c in the name of LLC too.

In whole year, she has got around 6K income only. My wife has submitted W9 form to this company with EIN of LLC. I guess she will be getting 1099 in Jan from this company too. Its getting difficult to get more work and its not worth to do it anymore. So we are thinking to close the LLC and just get the income in future (if any) as a sole proprietorship.

From tax purposes, we will be doing standard deduction so will show 1K

profit out of 6K income.

I have following questions:

What things should we consider before closing this LLC.
Should we close the LLC now (in Dec 2008) or wait after filing the taxes.
Will there be any issue if we close the LLC, surrender EIN etc. now in Dec. Then file taxes using her SSN as "Married filing jointly".

I am confused between making a decision that "Should we close LLC asap" or "Wait till after filing taxes - next year" ?

Regards David

Whether you maintain the LLC or not is irrelevant for tax purposes. Single-member LLC's are disregarded for tax purposes (unless she elects to have it taxed as a corporation, which I see no point in doing). Her income and business expenses are going to be on Schedule C on your joint 1040 regardless.

I have no idea what you mean by this statement. The business income/expenses are figured before you get to the main part of the 1040, where standard/itemized deductions come into play.

Do you want to pay another year's fees? (I really don't see why you thought you needed one in the first place, but that's your call. As mentioned before, it doesn't affect taxes one way or the other.

Doesn't matter.

You don't "surrender" the EIN, you just stop using it. As noted before, the LLC doesn't file anything on its own.

Doesn't matter.

Once again I'll offer my opinion that anyone opening a business needs a session with an accountant. Had your wife done this you wouldn't be asking these questions and she would have known what kind of records to keep, what estimated tax requirements there might be, and what her legitimate business expenses were.