Tax Elections

The type of legal structure you choose controls your options for tax election.

  • LLC – An LLC is by default a pass-through entity but can elect to be taxed as a C-Corp or and S-Corp depending on what better suits their overall goals.
  • Corporation – Corporations are subject to double taxation – the corporation and its shareholders are taxed. Corporations that meet certain requirements, can elect to be taxed as an S-Corp.
  • Partnership – Partnerships are pass through entities; each partner pays their proportional share of the business’ profits and losses on their personal tax returns.
  • Sole-Proprietorship – As a sole proprietor, you “get out what you put in” so to speak.  

There are benefits to each type of taxation based upon each unique situation. Discussing your short-term and long-term goals with an attorney and a tax advisor is a key step in determining what business structure is appropriate for your business.