Lee R. Schroeder is an Ohio licensed attorney at Schroeder Law LLC in Putnam County. He limits his practice to business, real estate, estate planning and agriculture issues in northwest Ohio. He can be reached at [email protected] or at 419-659-2058. This article is not intended to serve as legal advice, and specific advice should be sought from the licensed attorney of your choice based upon the specific facts and circumstances that you face.
Limited Liability Companies, or LLCs, are often established by business owners to protect assets and limit liabilities. Most often when an LLC is organized correctly, net taxes are not typically increased or decreased. But, there are some exceptions to this.
Taxpayers can decide to have their LLCs taxed like “S corporations” as opposed to “C corporations.” “S Corporations” are slightly less cumbersome in tax administration than “C Corporations.” Taxpayers can also decide to have their LLCs taxed like partnerships if there is more than one owner. If the LLC only has one member, then it can be taxed as a sole proprietorship. Most business attorneys will consult with a client’s tax preparation professional before advising on how an LLC should be taxed.
Limited liability companies are most often established and used as tools to protect assets and limit liability. Generally, an LLC can require a client to prepare an extra “tax schedule” or “tax return” each year. However, if organized properly, LLC owners’ net taxes are not typically increased or decreased because of the introduction and use of LLCs. However, there are exceptions.
Taxpayers can decide to have their LLCs taxed like corporations, specifically “S corporations,” which are slightly less cumbersome in tax administration than “C corporations.” S corporations also have requirements on the quantity and identities of ownership in those entities.
Read more about LLCs and taxes in Lee’s article in the Lima News here: Legal-Ease: LLCs and taxes
Source: LimaOhio.com, “Legal-Ease: LLCs and taxes,” by Lee R. Schroeder, September 23, 2017