This page discusses the taxation of a for profit LLC only. See the Non-Profit LLC page of this guide for information on receiving tax exempt status for a non-profit.
The federal tax reform bill passed at the end of 2017 provides tax incentives for incorporating into an LLC. Please see your tax advisor for more information.
LLCs are a favorable form of business entity because you can choose how the IRS should tax your LLC. Here are your choices and some reasons why you would choose to be taxed that way:
This guide is merely an introduction. Please see your tax adviser for more details.
The Internal Revenue Code does not provide a specific regime for LLC federal taxation. Instead the LLC must be taxed under one of the existing tax structures, namely as either a partnership or a corporation. Under the "Check-the-Box" Regulations LLCs are treated as pass-through entities, which means that the partners (or sole owner) just pay taxes on their individual tax return(s), unless an affirmative election to be taxed as a corporation or an S Corporation is filed with the IRS. The complexities of S Corporation taxation are beyond the scope of this guide. Please see a tax advisor for further information.
S-Corp or LLC - Which is Better? (By John M Miller, CPA)
Ohio LLCs are not taxable entities as such, but Ohio does impose filing, withholding, and tax remission obligations on them.