Gaap Income statement for single member LLC

Much depends on how LLC is filing taxes (to do GAAP FS correctly) since it is a disregarded entity. Filing as:

- Sole proprietor

- Partnership (na)

- S-Corporation

- C-Corporation

@raeray1st 

GAAP-compliant income statements for a single-member LLC (sole proprietorship) is not really possible IMO.  GAAP assumes that the owner's personal transactions are separate from the business transactions.  If the business is paying for your health insurance premiums, you are mixing personal expenses with the business.  Yes, the premiums are deductible, but they are deductible on your personal return, not Schedule C.   

I agree with Rainflurry, that you could not be compliant with GAAP if filing taxes as a Sole Proprietor and that health insurance would be a personal expense for that owner. In which case, I think those premiums would only be deductible on personal tax return if they exceed 7.5% of his gross income (or something close to that, right?)

Thank you. Seems like an owner draw for health insurance premiums should address the issue, no?

@raeray1st 

As mentioned previously, you really can't create GAAP-compliant financial statements for a SP.  If you work the business and pay yourself via an owner's draw (you can't pay yourself a salary in a SP), the business will understate its expenses and, therefore, overstate its income.  Presumably you know that GAAP requires the use of the accrual method of accounting.  The bigger question is why do you want GAAP-compliant financial statements?  An outside party that would require them will almost certainly require your business to be a separate entity from yourself, which a SP is not.

Agree again, so rare, lol.  Good question on why GAAP FS. 

I can share that all of my clients require GAAP FS since they are Govt contractors and that is required, and yes, they could not be SP and even LLC-Partenership does not work well since then they are not employees.

Agree you cannot be GAAP compliant if you are a single-owner LLC filing taxes as a Sole Proprietor.

However, since LLC is only a state designation, you must CHOOSE method for filing IRS tax returns:

Choices are:

LLC filing as SP           Can't do GAAP -- Takes draws from equity -- No payroll or benefits paid by biz

LLC filing as Corp        Can do GAAP -- Can be shareholder and employee, pays taxes on both sides

LLC filing as S-Corp    Can do GAAP -- Must be EE, get payroll, pay payroll tax, but biz pays no FIT

Note:  In CA, single-owner LLC does not exist so you must choose one of the above for taxes as I did.

I'm single-owner S-Corp, so I'm employee that gets paid payroll, pays payroll taxes, but no FIT on biz.