How are Limited Liability Companies taxed?
A Limited Liability Company can be taxed for federal income tax purposes as a partnership. A Limited Liability Company can choose partnership status in order to avoid taxation at the entity level. If a Limited Liability Company is not taxed as a partnership it is often taxed as a C corporation (as chosen on the IRS 8832 form). Some Limited Liability Company owners elect to choose their Limited Liability Company to be a “disregarded entity” for taxation purposes where the owner is fully responsible to report the taxes on his personal tax returns.
