Limited Liability Companies
Limited liability companies (LLCs) were created to provide businesses the tax benefits enjoyed by partnerships without the unlimited liability that general partners have. Limited liability companies have the liability protections of corporations. But they are taxed very differently (unless the limited liability company elects to be taxed as a corporation).
By default, a single member LLC is taxed as a sole proprietor. As far as the IRS is concerned, the entity is disregarded for tax purposes. No separate tax identification number is required. Business income and expenses are reported on schedule C of the personal tax return. Rental income and depreciation are reported as if there were no separate entity.
If there is more than one member (even if the members are husband and wife who otherwise file jointly), income and expenses are by default reported on a partnership return which is merely informational. The taxes are paid by the members of the LLC through their personal income tax returns.
I say "by default," because within 75 days of beginning business,the taxpayer may file an election to be taxed as a corporation.
For more information, email David W. T. Carroll
Carroll, Ucker & Hemmer LLC includes over 80 years of combined litigation experience with over 30 years related to the defense of architect and engineer malpractice claims as well as a variety of contract and other related business matters.
The information on this web site is for general reference only. To apply the information to an individual situation, you must consult a qualified professional. Unless you contract for specific services from us, there is no attorney-client relationship established.
Carroll, Ucker & Hemmer LLC
175 S. 3rd St., Suite 200
Columbus, Ohio 43215
fax: (614) 547-0354
All members of Carroll, Ucker & Hemmer LLC are licensed to practice law in Ohio.