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Barbara
Barbara, Enrolled Agent
Category: Tax
Satisfied Customers: 3481
Experience:  18+ years of experience in tax preparation; 25+ years of experience as a real estate/corporate paralegal.
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Should I file a Form 8832 if Im a single member LLC?

Customer Question

Should I file a Form 8832 if I'm a single member LLC? I'm currently the owner of a single member LLC and I'm curious if I should file a form 8832? I want to maximize my tax savings and deduction abilities and not sure if filing this will help. Any details on this would be excellent

Submitted: 4 years ago via Cornell Legal Info Institute.
Category: Tax
Expert:  Barbara replied 4 years ago.

Welcome and thank you for giving me the opportunity to assist you with your tax question.

 

An LLC is a disregarded entity for tax purposes. Since you're a single member LLC, you would utilize Schedule C of your personal 1040 tax return to report your income and expenses.

 

If you use Form 8832 and change to, for example, an S corporation, the S corporation would have to file its own tax return, and since it's a pass-through entity, would issue a K-1 to you, which would then be included on your personal 1040 tax return.

 

My opinion is to keep it simple.

 

Please let me know if you require further information or clarification. Thank you.

 

 

Customer: replied 4 years ago.

When you say keep it simple, do you mean NOT file an 8832?

Expert:  Barbara replied 4 years ago.

Hi, Anthony.

 

A single member LLC considered a sole proprietorship unless you elect otherwise. By being a sole proprietorship, as I stated, you would use Schedule C of your personal 1040, rather than using Form 8832 and changing your classification for tax purposes.

 

Thank you.

 

Barb

Customer: replied 4 years ago.

By staying a single member LLC am I missing out on potential liability benefits?

Expert:  Barbara replied 4 years ago.
No. An LLC is a disregarded entity for tax purposes only. The LLC is recognized in all other business.
Expert:  Barbara replied 4 years ago.
Hi, Anthony.

Please let me know if you have any other concerns about changing your entity classification, and I will be happy to assist you.

Thanks.

Barb