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Benefits of Forming an LLC
- Shields assets from business debts and lawsuits
- Prevents double taxation of owners
- Protects personal assets
- Income and expenses on member’s tax return
- LLC owners not personally liable for company debts
LLC Setup and Taxation
- States regulate LLCs
- Main cost: state filing fee
- LLCs can be expensive to form and maintain
- LLCs prevent double taxation and limit liability
- Disputes between members possible
- Taxes on corporate and personal levels
- Self-employment tax for members
Taxation and Structure of LLCs
- LLCs treated as pass-through entities by the IRS
- LLCs allow owners corporate advantages with tax benefits
- LLCs taxed like a partnership with multiple owners
- Corporations limit liability; partnerships enable pass-through taxation
- LLCs offer flexibility in structure and tax status