What's up guys, Taylor Mathis here, the quinoa girl, marketing director and legal assistant at Heat Law. Today, I'm going to tell you guys all four ways that an LLC can be taxed. But before I forget, like this video, comment with any questions that you have, and of course, subscribe to our channel for more videos like this one. We upload new content every week to assist with your legal needs. And one other quick tip, all of the forms mentioned in this video are linked in the show more section below the video. So, one of the advantages to forming an LLC is that it allows maximum flexibility for choosing a method of federal taxation. For example, if an individual formed a limited partnership, the limited partnership must be taxed as a partnership. Whereas an individual who forms a corporation must be taxed as either an C corporation or an S corporation. But a person who forms an LLC can choose their federal tax option. You can elect to be taxed as a partnership, a C corporation, an S corporation, or a sole proprietorship. So, here are the four ways your LLC can be taxed and some of the pros and cons of each. The first way is the sole proprietorship method. A sole proprietorship is the default classification for a single-member LLC. Only a single-member LLC may be taxed as a sole proprietorship. A sole proprietorship doesn't have to file any separate tax returns and is a disregarded entity for federal income tax purposes. The member of an LLC reports all the economic activity of the LLC on their personal income tax return on Schedule C. The taxpayer then pays any tax associated with the LLC on their personal income tax return. A major advantage to having an LLC taxed...
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Video instructions and help with filling out and completing Can Form 1120 Schedule M 3 Disregarded
