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LLC Electing S Corp Tax Status: An Option You May Not Know You Have

Source: bizfilings.com - Mar 5, 2020

If you decide to form an LLC to own and operate your small business, you have a couple of choices for how you want your LLC to be taxed. For federal income tax purposes, there is no such thing as being taxed as an LLC. Instead, an LLC can be taxed like a sole proprietorship, a partnership, a C corporation or—if it qualifies—an S corporation.

Although being taxed like an S corporation is probably chosen the least often by small business owners, it is an option. For some LLCs and their owners, this can actually provide a tax saving≈particularly if the LLC operates an active trade or business and the payroll taxes on the owner or owners is high.

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Category: General Business