Business structure
How LLCs are taxed: single-member, multi-member and elections
The IRS has no LLC tax category. It taxes an LLC as a disregarded entity, a partnership or a corporation. See the default rules, the Form 8832 and Form 2553 elections, the returns each files and the deadlines.
Prepared by Aldro Accounting · Updated · Sources checked
The quick answer
The IRS treats an LLC as a corporation, a partnership or a disregarded entity, depending on its elections and number of members. By default, a one-member LLC is disregarded and reported on the owner's return (Schedule C, E or F for an individual), and a domestic LLC with two or more members is a partnership that files Form 1065. An LLC can file Form 8832 to be taxed as a corporation (Form 1120) or, if eligible, Form 2553 to be taxed as an S corporation (Form 1120-S).
The IRS has no separate LLC tax status
The IRS describes an LLC as a business structure allowed by state statute. Its owners are called members. Most states don't restrict ownership, so members can be individuals, corporations, other LLCs and foreign entities, and there is no maximum number of members. Most states also allow single-member LLCs. A few types of business, such as banks and insurance companies, generally can't be LLCs.
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| Classification | How it happens | Federal return | Where owners report |
|---|---|---|---|
| Disregarded entity | Default for a one-member LLC | None of its own for income tax | Owner's return: Schedule C, E or F of Form 1040 for an individual |
| Partnership | Default for a domestic LLC with two or more members | Form 1065 | Each member's Schedule K-1 (Form 1065) |
| C corporation | Form 8832 election | Form 1120 | No flow-through items to Form 1040 |
| S corporation | Form 2553 election by an eligible LLC | Form 1120-S | Each owner's Schedule K-1 (Form 1120-S) |
For federal income tax, the IRS puts every LLC into one of three existing boxes: a corporation, a partnership or an entity disregarded as separate from its owner. Which one depends on how many members the LLC has and what it elects.
Single-member LLC taxes
A one-member LLC is disregarded as separate from its owner for income tax unless it files Form 8832 and elects to be a corporation. If the owner is an individual, the LLC's activity generally goes on Form 1040 or 1040-SR, on Schedule C (business), Schedule E (supplemental income) or Schedule F (farming). If a corporation or partnership owns it, the LLC is reported on the owner's return as a division.
An individual owner of a single-member LLC that runs a trade or business owes self-employment tax on net earnings the same way a sole proprietor does.
For employment tax and certain excise taxes, the IRS still treats a one-member LLC as a separate entity. For wages paid after January 1, 2009, it uses its own name and EIN to report and pay employment taxes. It also uses its own name and EIN for excise tax registration on Form 637 and excise returns such as Forms 720, 730, 2290 and 11-C.
A disregarded single-member LLC with no employees and no excise tax liability doesn't need an EIN. It uses the owner's name and taxpayer ID for federal tax purposes. On a Form W-9, it gives the owner's SSN or EIN, not the LLC's EIN.
Multi-member LLC taxes
A domestic LLC with at least two members is classified as a partnership unless it files Form 8832 and elects to be a corporation. Normal partnership rules apply. The LLC files Form 1065, and each member reports their share of income, credits and deductions from Schedule K-1 (Form 1065). Members of LLCs filing partnership returns generally pay self-employment tax on their share of partnership earnings.
Spouses are a special case. Rev. Proc. 2002-69 covers an LLC owned only by a married couple as community property, which can be treated as a disregarded entity or a partnership. In a non-community property state, an LLC owned by a married couple should file as a partnership. Because an LLC is a state law entity, it can't be a qualified joint venture.
Membership changes also change the classification. Under the Form 8832 instructions, an entity taxed as a partnership becomes a disregarded entity when it drops to one member, and a disregarded entity becomes a partnership when it has more than one member.
Self-employment tax for LLC members
Self-employment tax is figured on Schedule SE. The rate is 15.3%: 12.4% for Social Security and 2.9% for Medicare. It applies when net earnings from self-employment are $400 or more.
For 2026, the Social Security part applies to the first $184,500 of combined wages, tips and net earnings. An additional 0.9% Medicare tax applies when wages, compensation or self-employment income go over $200,000 for single filers, $250,000 for married filing jointly or $125,000 for married filing separately.
The employer-equivalent portion of self-employment tax is deductible when figuring adjusted gross income. That deduction affects income tax only, not net earnings from self-employment or the self-employment tax itself.
Electing corporate tax treatment with Form 8832
Form 8832 changes an LLC's default classification. A new LLC that will use its default classification shouldn't file it. An LLC taxed as a C corporation files Form 1120, and nothing flows through to the owners' Form 1040.
An election generally can't take effect more than 75 days before the date it is filed, or more than 12 months after. The IRS generally sends a determination within 60 days of filing. A copy of Form 8832 is attached to the entity's federal tax or information return for the year of the election.
After an election to change classification, the entity generally can't change again by election during the 60 months after the effective date. The IRS may allow it sooner by private letter ruling if more than 50% of the ownership has changed hands. Late election relief can be requested within 3 years and 75 days of the requested effective date.
Electing S corporation status with Form 2553
An eligible LLC that timely files Form 2553 and meets the other S corporation requirements is deemed to have elected to be taxed as a corporation, so it doesn't file Form 8832 as well. It then files Form 1120-S, and each owner reports their share on Schedule K-1 (Form 1120-S).
To qualify, the IRS says the entity must be domestic, have only allowable shareholders (individuals, certain trusts and estates, not partnerships, corporations or non-resident aliens), have no more than 100 shareholders and have only one class of stock.
Form 2553 is due no more than 2 months and 15 days after the beginning of the tax year the election is to take effect, or at any time during the tax year before. The IRS generally sends a determination within 60 days. Relief for a late election can be requested within 3 years and 75 days of the effective date on line E of the form.
S corporations required to file 10 or more returns of any type in a calendar year must e-file Form 1120-S.
LLC filing deadlines by classification
Each classification has its own federal due date, set out in IRS Publication 509. Form 7004 gives partnerships and corporations an automatic 6-month extension, and Form 4868 does the same for individuals.
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| Classification | Return | Due date | Extension form |
|---|---|---|---|
| Disregarded (individual owner) | Form 1040 or 1040-SR | 15th day of the 4th month after the tax year ends | Form 4868 |
| Partnership | Form 1065 and Schedules K-1 | 15th day of the 3rd month after the tax year ends | Form 7004 |
| S corporation | Form 1120-S | 15th day of the 3rd month after the tax year ends | Form 7004 |
| C corporation | Form 1120 | 15th day of the 4th month after the tax year ends | Form 7004 |
Publication 509 (2026) listed March 16, 2026 as the date for 2025 calendar-year partnership returns (Form 1065) and S corporation returns (Form 1120-S).
Aldro's flat yearly price covers everything tax for the year, whichever way the LLC is taxed. Our team prepares and files Schedule C, Form 1065, Form 1120-S or Form 1120 and the state returns that go with them.
Worked example
Say a one-member LLC owned by an individual has $100,000 of net earnings from self-employment in 2026. It files no income tax return of its own. The owner reports the business on Schedule C and figures self-employment tax on Schedule SE: 12.4% of $100,000 is $12,400 and 2.9% of $100,000 is $2,900, for $15,300. The employer-equivalent portion of that tax is deductible in figuring adjusted gross income. If a second member joins with an equal share, the LLC becomes a partnership, files Form 1065 and gives each member a Schedule K-1 with $50,000, and each member generally owes self-employment tax on their own share: 15.3% of $50,000, or $7,650 each.
Common questions
How is a single-member LLC taxed?
By default it is disregarded for income tax. An individual owner reports it on Schedule C, E or F of Form 1040 and owes self-employment tax like a sole proprietor. It is still a separate entity for employment and certain excise taxes.
How is a multi-member LLC taxed?
A domestic LLC with two or more members is a partnership by default. It files Form 1065 and gives each member a Schedule K-1. Members generally pay self-employment tax on their share of earnings.
Does a new LLC need to file Form 8832?
No, not if it will use its default classification. Form 8832 is only for choosing a classification other than the default.
Does an LLC file both Form 8832 and Form 2553 to become an S corp?
No. An eligible LLC that timely files Form 2553 is deemed to have elected corporate classification, so Form 8832 isn't needed.
How often can an LLC change its tax classification?
After an election to change classification, generally not again for 60 months after the effective date, unless the IRS allows it by private letter ruling after more than 50% of the ownership changes.
Which taxpayer ID does a single-member LLC put on a W-9?
A disregarded single-member LLC gives the owner's SSN or EIN on Form W-9, not the LLC's EIN.
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Sources
- IRS: Limited liability company (LLC) · checked October 31, 2026
- IRS: Single member limited liability companies · checked October 31, 2026
- IRS: LLC filing as a corporation or partnership · checked October 31, 2026
- IRS: Self-employment tax (Social Security and Medicare taxes) · checked October 31, 2026
- IRS: Form 8832 and instructions · checked October 31, 2026
- IRS: S corporations · checked October 31, 2026
- IRS: Instructions for Form 2553 · checked October 31, 2026
- IRS: Publication 509 · checked October 31, 2026
- IRS: Publication 509 (2026) · checked October 31, 2026
This guide explains general rules from the sources listed. It isn’t tax advice for your situation.