Gov't Forms & Instructions
A multi-member LLC's default tax classification is Partnership.
A single-member LLC or SMLLC's default tax classification is that of a "disregarded entity" and it is treated as though the SMLLC was never formed.
For example, an LLC or SMLLC may use Form 8832 to "check the box" and elect an allowable tax classification which differs from its default tax classification. Most (but not all) state taxing authorities will follow the IRS determination, in this regard.
An LLC may elect to have a C-Corporation tax classification or an S-Corporation tax classification. Most (but not all) state taxing authorities will follow the IRS determination, in this regard.
- Current version Form 2553
- Current version Form 2553 instructions
- Draft of next version Form 2553
- Draft of next version Form 2553 instructions
When filing Form 2553 for a late S corporation election, the corporation (or other entity eligible to elect to be treated as a corporation) must enter in the top margin of the first page of Form 2553 “FILED PURSUANT TO REV. PROC. 2013-30.”
Also, if the late election is made by attaching Form 2553 to Form 1120-S, the corporation (or other entity eligible to elect to be treated as a corporation) must enter in the top margin of the first page of Form 1120-S “INCLUDES LATE ELECTION(S) FILED PURSUANT TO REV. PROC. 2013-30.”
A corporation (or other entity eligible to elect to be treated as a corporation) must use Form 2553 to make an election under section 1362(a) to be an S corporation. An entity eligible to elect to be treated as a corporation that meets certain tests will be treated as a corporation as of the effective date of the S corporation election and doesn’t need to file Form 8832, Entity Classification Election.
Joint Ownership of LLC by Spouses in Community Property States
Rev. Proc. 2002-69 addressed the issue of classification for an entity that is solely owned by husband and wife as community property under laws of a state, a foreign country or possession of the United States.
If there is a qualified entity (an LLC that is not taxed as a corporation) that is owned solely by a husband and wife as their community property, and they choose to treat the entity as a disregarded entity for federal tax purposes, the Internal Revenue Service will accept the position that the entity is disregarded for federal tax purposes.
Or they may choose to treat the entity as a partnership for federal tax purposes, and the Internal Revenue Service will accept the position that the entity is a partnership for federal tax purposes.
Generally the decision should be followed consistently year-by-year. If they change their minds, that is treated as a conversion of the entity and a new federal tax ID number may be required, along with other complications.