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An individual has formed sole member LLC. Am I correct in…

an individual has formed sole...
an individual has formed sole member LLC. Am I correct in concluding that an election can be made to file as a S Corporation or file a Schedule C? If I am correct, are there any advantages to elect to be treated as a S Corporation for federal tax purposes?
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Answered in 4 minutes by:
3/14/2018
bkb1956
bkb1956, Finance Enthusiast
Category: Finance
Satisfied Customers: 6,684
Experience: IRS Enrolled Agent, 20+ years of experience in tax preparation with associated finance experience.
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Welcome to Just Answer. My name is ***** ***** I will be happy to assist you.

You are correct. You can elect to have the LLC treated as a disregarded entity and use Schedule C to report your income and expenses

OR

You can elect S corporation status. The S corporation will file its own tax return (Form 1120S), but will pay no tax. Any profit/loss is passed through to the shareholder via K-1 to be included on his personal tax return.

Under the tax reform bill passed in December, 2017, both will qualify for the 20% pass through deduction on net income.

The following link contains information regarding LLC vs. S corporation:

https://www.bizfilings.com/toolkit/research-topics/incorporating-your-business/s-corp-vs-llc

Once you have reviewed the information, please let me know if you have any other questions.

Thank you and best regards,

Barb

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Just following up with you to see if you have any other questions. If so, please let me know so I can continue to assist you.

bkb1956
bkb1956, Finance Enthusiast
Category: Finance
Satisfied Customers: 6,684
Experience: IRS Enrolled Agent, 20+ years of experience in tax preparation with associated finance experience.
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