Attorney Thomas B. Burton discusses how single member LLC's are treated by default as disregarded entities for federal tax purposes by the IRS, and explains why a single member LLC treated as a disregarded entity is taxed similar to a sole proprietorship. This is why you will sometimes hear a single member LLC referred to as a "single member LLC taxed as a sole proprietorship" or a "single member LLC taxed like a sole proprietorship" or some variation on this theme. A Limited Liability Company (LLC) is a distinct and separate legal entity, formed by filing Articles of Organization under state law, unlike a sole proprietorship where there is no separate legal entity separate from the individual, however a single member LLC is taxed by a default as a disregarded entity in the eyes of the IRS, similar to a sole proprietorship. A single member LLC may opt out of the default tax status as a disregarded entity with the IRS by electing to be treated and taxed as a corporation.
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For more information on single member LLC taxes, check out the IRS website on this topic here: www.irs.gov/businesses/small-...
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Негізгі бет How is a Single Member LLC Taxed? | Disregarded Entity
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