How to start a one man bussiness

[dhc8fo]

I'd love to see =that= paperwork. An LLC is automatically treated as a partnership or sole proprietorship for tax purposes (which is how an S-corp is treated by choice). It's if you want an LLC to be treated like a C Corp that you "apply" for something. The only time you'd apply for an LLC to be treated like an S-corp is if, in the past you applied for it to be treated like a C-Corp.
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The IRS has issued a ruling stating that a single member LLC owned by an individual may own stock in an S corporation without causing a termination of the S corporation's election.

 

[kaj837]

Pretty sure dhc8fo is correct, an LLC can have S corp status since that is just an IRS status that allows it to be taxed as a partnership. There are a lot of misconceptions on the part of the original poster as well as some of the responders. Enough that if you are really serious about this a tax attorney and a CPA, not a bookkeeper, would be critical necessities.

 

[midlifeflyer]

The IRS has issued a ruling stating that a single member LLC owned by an individual may own stock in an S corporation without causing a termination of the S corporation's election.

True. That's because unless a single-member LLC makes an election to be treated as a C-Corp, it is automatically taxed as an individual. (Just like a multi-member LLC is treated as a partnership if it doesn't make an election to be treated like a C-Corp) So there's no net taxation difference between a single member LLC and an individual.

As kaj837 pointed out, there are a lot of misconceptions about this. Even more than we're talking about. I'm being nit-picky because, unfortunately people usually take the wrong information from these kinds of discussions. If they at least see disagreement, they might at least think about seeing a professional before trying to apply it to their own situations.