Single Member LLC with both spouses

[Adrian Brown]

I understand that me and my wife can both be on our Texas LLC, and we can still file as a Single Member LLC so that we have a disregarded entity from a tax perspective, but we still have the liability protection. In fact, Senate Bill 2314 went into effect 9/1/2023 for this scenario. My question is, is there something a person must do when forming the LLC to designate the status of "Single Member" so that we have pass-through for income/losses instead of a partnership with K-1 documents, or is this "Single Member" status just something we tell our CPA during tax time so they know to treat all income/losses?

[Adrian Brown]

Quote from @Greg Scott:

An LLC does not have to be a single-member LLC to have pass-through tax treatment while retaining liability protection. Talk to your CPA.

I have heard some lawyers say a multi-member LLC may provide more protection, but I suspect that varies by state. Talk to your attorney.

A disregarded entity is an entirely different thing.

@Greg Scott what you said is correct, the LLC is a pass-through entity regardless if it's a single member or a multi member partnership where K-1s are distributed to each member. However, my goal is to make this a single member so that it is disregarded for federal tax perspective, thus saving me from needing to file for the entity itself since a single member is taxed like a sole proprietorship with profits/losses hitting my 1040, saving time and money from filing taxes for the entity itself. As for protection, you're right in that in the past some states have viewed multimember as having more protection, but I live in Texas and just recently a new law went into affect on 9/1/2023, where Texas views a single member LLC no different than multi member with regards to liability protection (senate bill 2314). But again, in short I want the single member treatment because it's more efficient from a tax perspective since it eliminated an extra filing, and therefore extra cost, every year.