Question

LLC vs. Sole Proprietor

Forum|Forum|4 years ago
October 27, 2021
1 reply
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Are there any new laws that imply any tax differences between single-member LLC rather than staying as a sole proprietor (no employee)? My understanding is that it makes no difference as far as taxes go, but I wonder if that's still true...

A

Anonymous_

@AdventureShawn wrote:

....My understanding is that it makes no difference as far as taxes go, but I wonder if that's still true...

You are correct; it makes no difference and is still the case for federal income tax purposes.

A single-member LLC (without an election to be treated as a corporation for federal income tax purposes) is essentially a sole proprietorship as far as the IRS is concerned.

Note that there is a difference with respect to state law and liability, etc.