For tax purposes, by default, an LLC with one member is disregarded as an entity. And, once it has elected to be taxed as a corporation, an LLC can file a Form 2553, Election by a Small Business Corporation, to elect tax treatment as an S corporation.

How does an LLC elect to be treated as an S corp?

The process of changing the tax status of an LLC to a corporation or S corporation is called an election. To elect Corporation status, the LLC must file IRS Form 8832 – Entity Classification Election. To elect S Corporation status, the LLC must file IRS Form 2553 – Election by a Small Business Corporation.

When would you use an S corp as opposed to an LLC?

Remember, the difference between an LLC and an S corp is that S corp status allows business owners to be treated (for tax purposes) as employees of the business. It only makes sense to file taxes as an S corp if there is enough net profit to pay owners a reasonable salary and at least $10,000 in annual distributions.

How do I change my LLC to S corp on taxes?

You can change your limited liability company (LLC) to an S corporation (S corp) by filing Form 2553 with the Internal Revenue Service (IRS).

Can a LLC convert to a corporation in Washington State?

Corporation and Limited Liability Company (LLC) laws now join the Limited Partnership law in Washington in allowing these entities to convert to certain other structures, as well as change their domicile.

How to become a S-corporation in Washington State?

If you want your corporation to be treated as an S-corporation, complete Form 2553 – Election by a Small Business Corporation within 75 days of forming your business or within 75 days of the beginning of a tax year (see Form 2553 Instructions ). Limited Liability Companies (LLCs) are taxed like sole proprietorships if there is only one owner.

Can a LLC be changed to a S corporation?

When an LLC wants to be an S corporation instead, they will need to formally change their entity type with the formation state. At this time, they can also put in a request to change to an S corporation for tax purposes.

What does a Washington limited liability company do?

A Washington Limited Liability Company (LLC for short) is a hybrid business entity that offers you personal liability protection in case of a lawsuit. In the event your LLC is sued, your personal assets (like your home, vehicles, and personal bank accounts) remain safe from creditors.