Single-Member LLC Taxation
A single-member LLC can be taxed as a disregarded entity. The income and expenses are reported on the owner’s tax return. An LLC with one member is treated by the IRS as disregarded for income tax purposes. However, for employment and excise taxes, a single-member LLC is a separate entity. The member avoids double taxation of income.
Every single-member LLC pays an $800 Franchise Tax to the Franchise Tax Board each year. Running an LLC offers liability protection and tax benefits. The LLC gets taxed as part of the owner’s return.
For married couples, an LLC means easier tax filing. A single-member LLC allows for minimal tax filing costs.
Maintaining S-Corp Status
To maintain S-Corp status can feel complex for small business owners. Consult a tax professional to understand impacts for your business.
LLC Ownership and Structure
An LLC offers limited liability protection to its owners (members) while providing the simplicity and flexibility of a partnership. Owners of an LLC are called members. Most states do not restrict ownership, so members may include individuals, corporations, other LLCs and foreign entities. There is no maximum number of members. Most states also permit “single-member” LLCs, those having only one owner.