Post a new topic
    2 Replies Latest reply on Nov 4, 2008 10:36 PM by 1Shakira

    LLC - Disregarded Entity

    1Shakira Newbie
      I am operating as a single member LLC. After applying for my EIN, my LLC became a "disregarded entity". I can change this status by completing a Form 8832. Should I change my status? What exactly does "disregarded" mean in legal context any way?
        • Re: LLC - Disregarded Entity
          Lighthouse24 Ranger

          "Disregarded entity" means that your business is not considered by the IRS (and possibly your state taxing authority) to be a separate entity from you for tax purposes -- i.e., you and your business are one in the same as far as taxes are concerned.

          Should you change that? I don't know your specific situation, but in general, if it made sense to form a single member LLC in the first place, then there may be some good reasons to file the 8832 and change that status (for example, as a disregarded entity, you'd be personally responsible for employment tax obligations). You really need the advice of an accountant -- or at least someone who is bigger advocate of single member LLCs than I am.

          Welcome to the community and best wishes.
          1 of 1 people found this helpful
          • Re: LLC - Disregarded Entity
            1Shakira Newbie

            I have views on my other posts, but no replies.

            I do have a CPA, but no bus. atty yet. Thank you Lighthouse for your reply.