8 Ways LLC Members Are Taxed On Their Income

If you're an LLC member, then you're probably wondering how you're taxed on your income. In this video, we'll explore 8 ways LLC members are taxed on their income. “Now when it comes to LLCs and taxation, the first thing we need to determine is how your LLC is set up. Is it a member-managed or manager-managed limited liability company?” 0:28 I explain how the set up of your LLC affects tax selection and income taxation. The first option discussed is a single-member LLC, which can be treated as a disregarded entity for tax purposes. The second option is for LLCs with passive income, which can be taxed on Schedule E. The third option is for LLCs with two members, which can elect to be treated as a partnership and file a 1065 tax return. The income will then flow down to each member based on their ownership interests. If the LLC is engaged in an active business, the income generated from actively working in the business is considered active income and is subject to higher employment taxes. I want to emphasize the importance of understanding how LLCs are being taxed, both in terms of their federal tax setup and the engagement level of members or managers, Members control the day-to-day operations of an LLC, while managers are responsible for overseeing the company. If a member owns an LLC, he or she is usually taxed as a partner in that entity. Claim Your FREE 45-minute Investment Strategy Session to receive business planning tips and asset protection. 👉 https://aba.link/ghr Thank you for watching our video! Leave us a comment with your tax questions and subscribe to the channel for more tax tips like this. Show Notes: 0:00 Intro 0:28 Member vs. Manager 3:34 Active Business 5:31 S-Corp Setup 8:37 C-Corp Setup 10:54 Outro --------------------------------------------------------------------------------------------------------- SUBSCRIBE https://www.youtube.com/c/RealEstateA... ~~~~ FREE REAL ESTATE INVESTMENT STRATEGY SESSION Claim Your FREE 45-minute Investment Strategy Session to receive business planning tips and asset protection. 👉 https://aba.link/ghr FREE TAX & ASSET PROTECTION WORKSHOP Learn about Real Estate & Asset Protection from Clint Coons, Esq. and Toby Mathis, Esq. at our next all-day free Livestream 9 am to 4 pm PT. on Saturdays. Our attorneys and specialists will answer ALL questions: 👉 Save Your Seat: https://aba.link/7lh ~~~~ FINANCIAL PLANNING & RESOURCES Download your free copy of Un-Tax Yourself eBook and discover the secret to real estate wealth is in the tax deductions. https://aba.link/l26 For financial strategies, podcasts, articles and details on upcoming workshops visit https://aba.link/clintaba Here’s a little about me and my book Asset Protection for Real Estate Investors https://aba.link/clintbio ~~~~ FOLLOW US: Instagram: https://aba.link/instagram Facebook: https://aba.link/facebook Twitter: https://aba.link/twitter LinkedIn: https://aba.link/linkedin ~~~~ CONTACT US Phone: 800.706.4741 Email: [email protected] Fax: 702.664.0545 ABOUT CLINT COONS Clint Coons, Esq. is one of the founding partners of Anderson Law Group, Clint has grown his legal and tax firm to over 400 employees by assisting real estate investors with creating and implementing solid entity structuring plans. His success in these regards is in large part due to his personal investing experience. A successful attorney, real estate investor, and speaker, Clint has used his innovative and dynamic strategies coupled with knowledge borne from experience to help thousands of people save millions of dollars and build real wealth. --------------------------------------------------------------------------------------------------------- The information provided in this video should not be construed or relied on as legal advice for any specific fact or circumstance. Its content was prepared by Anderson Business Advisors with its main office at 3225 McLeod Drive Suite 100 Las Vegas, Nevada 89121. This video is designed for entertainment and information purposes only. Viewing this video does not create an attorney-client relationship with Anderson Business Advisors or any of its lawyers. You should not act or rely on any of the information contained herein without seeking professional legal advice. #llc #incometax #llcmembers