A single-member LLC is taxed like a sole-proprietorship. This means that they pay a “self-employment” tax and simply add any income onto their 1040 personal tax return via Schedule C.
An LLC with 2 or more members is taxed like a partnership where each partner adds their portion of income onto their 1040 personal tax returns. The LLC must also file an informational return showing all the members and their income on form 1065.
An interesting aspect of an LLC is that it can file a form with the IRS and elect to be taxed like a corporation by filing an IRS Form.
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