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How is an LLC taxed?


Entity Classification Election Filing Service


The Limited Liability Company (LLC) entity type is flexible on how it can pay taxes to the federal government. It can pay taxes like a Sole Proprietorship, a Partnership, a Corporation, or even like an S-Corporation. With Sole Proprietorships, Partnerships, and S-Corporations, business income is taxes as the personal income of the owners. With a Corporation, the Corporation itself pays taxes on its income, and additionally, the owners are taxed on income they take from the Corporation. The Entity Classification Election is the filing an LLC makes to tell the IRS how it wishes to be taxed.



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Can an LLC elect S-Corporation taxation? Yes, for taxation reasons too complicated to explain here, an LLC may sometimes decide that it desires to be taxed by the IRS like an S-Corporation. To do so, it can file an S-Corporation Election, ...
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Are there any default elections? If a Limited Liability Company (LLC) does not file an Entity Classification Election, the Internal Revenue Service (IRS) will assume that it wants to be taxed it like a Sole Proprietorship if it has ...
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What is pass-through taxation? Pass-through taxation refers to the taxation of business entities like S-Corporations, many LLCs, General Partnerships, and Sole Proprietorships, whereby the business pays no income tax. Instead all ...
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What types of entities make this election? Eligible Limited Liability Companies (LLCs), partnerships, sole proprietorships, and foreign entity types can make this election with the IRS. But the document preparation and filing service we offer ...
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