LLC Tip of the Day:

You must pay taxes on all profits each year. This applies regardless of whether you distribute the profits (i.e. pay yourself) or decide not to touch the money and keep it in the business.

A brief THREAD https://abs.twimg.com/emoji/v2/... draggable="false" alt="👇🏾" title="Rückhand Zeigefinger nach unten (durchschnittlich dunkler Hautton)" aria-label="Emoji: Rückhand Zeigefinger nach unten (durchschnittlich dunkler Hautton)">

By default, the IRS will treat your LLC as a “disregarded entity.” This means that it will not look at your LLC as a separate entity for tax return purposes. You will pay taxes on the business income as part of your personal tax return.

Because tax responsibility pass thru the business and onto you personally, this way of taxing profits is called “pass thru taxation.”

You don’t need to specify your tax classification with the IRS if this is your preferred method. This is the default. However, if you want your LLC to be taxed as a corporation, you do need to make an election with the IRS.

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