LLC Formation and Taxation
LLCs prevent double taxation and limit liability. Setting up an LLC shields assets from business debts and lawsuits. LLCs are hybrids, with flexibility. Owners choose tax status but may face double taxation.
States regulate LLCs. The main LLC cost is the state filing fee. LLCs allow owners to enjoy corporate advantages while retaining tax benefits. There are benefits and drawbacks to each LLC tax structure.
Corporations limit liability; partnerships enable pass-through taxation. LLCs combine aspects of partnerships and corporations.
LLC Management and Taxation
Members manage LLCs jointly. Differing ideas can cause conflict. Income and expenses go directly on the member’s tax return. Another LLC downside is taxation complexity. If an LLC has multiple owners, it’s taxed like a partnership. Members also owe self-employment tax.
LLC Annual Reporting and Compliance
For tax purposes, the IRS treats an LLC as a pass-through entity. Even without a reminder, you must file your NC Annual Report by April 15 each year. All NC corporations, LLCs, and partnerships must file yearly updates, with the 2023 filing fee being $200. Include your business’s name, address, and your officers’, directors’ and agent’s names and addresses in the report. If not filed on time, LLCs get a Notice of Grounds and have 60 days to file.