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Updated about 1 year ago on . Most recent reply
Taxes question for LLCs
I recently created a Single Member LLC, mainly because I don't have trusted partner(s), so I didn't have a choice.
Is it true that SM LLCs do not have to report federal taxes and all profit/loss activities should be reflected on my personal federal tax return?
Will this void the liability protection an LLC offers?
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#2 Managing Your Property Contributor
- Rental Property Investor
- SE Michigan
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#2 Managing Your Property Contributor
- Rental Property Investor
- SE Michigan
Taxes and liability are separate things. You can file your taxes correctly but manage your LLC improperly and lose liability protection. You can manage your LLC perfectly and maintain its integrity, but screw up your tax filings and get in trouble with the IRS.
It's best to seek competent help from both a lawyer and a CPA.
BTW, there are always choices. Depending on what you are doing, a good alternative to a single member LLC may be no LLC whatsoever. LLCs can be very important but people make a lot of money selling them to to newbies who may not have a real need for one.