How to file the LLC as an S Corporation?

Yes, an LLC (Limited Liability Company) can elect S-Corporation tax status to file taxes. LLC is considered a most attractive and protective structure to conduct business universally. But here our discussion is limited to United States.

Many folks want to form an LLC and the same time have a question how can they avoid funding to self-employment taxes and pull out officers salaries with LLC (Limited Liability Company) structure?

  Tax Treatment of LLC as an S-Corporation:

•   S corporation election  must be filed to get approval from the agencies.

• If an LLC elects to file taxes as an s-corporation then the profit or loss will be passed through to 1120-S. Same as an S-Corporation.

•  Owners-officers of an S corp. who perform services for the S corp. shall be considered employees of the S corp. Therefore, they can take the payroll out from the S-Corporation.

• Owners-Officers of an S corp. would take funds out of the S corp. thru shareholder distribution (of profit) and a salary for his or her work performed as an employee of the S corp.

For more information please following link:

https://www.infotaxsquare.com/article/eligible-entity-classification-for-corporation-llc-partnership.html