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LLC Taxation Explained
By BookMyLLC ExpertMarch 22, 20268 min read
LLC Taxation: A Complete Guide
Understanding LLC taxation is crucial for making informed business decisions. This guide covers the basics of how LLCs are taxed.
Default Taxation
Single-member LLCs are taxed as disregarded entities (report on Schedule C). Multi-member LLCs are taxed as partnerships (file Form 1065). Both enjoy pass-through taxation – profits are only taxed at the individual level.
Electing Alternative Tax Treatment
An LLC can elect to be taxed as an S-Corp (Form 2553) or C-Corp (Form 8832). S-Corp election can reduce self-employment taxes. C-Corp election may be beneficial for reinvesting profits.
