LLC Taxation
Definition
How a US limited liability company is taxed, which is flexible: a single-member LLC is taxed by default as a sole proprietorship, a multi-member LLC as a partnership, and either can elect corporate or S-corp treatment.
Related Terms in US Tax
Pass-Through Entity
A business whose income is not taxed at the entity level but passes through to the owners, who report it on their own returns. Sole proprietorships, partnerships, S corporations and most LLCs are pass-throughs.
Form 1099-R
A US information return reporting distributions from pensions, annuities, retirement plans and similar accounts, used by recipients to report retirement income.
Sales Tax vs Use Tax
Sales tax is collected by a seller at the point of sale; use tax is owed by the buyer on taxable goods where sales tax was not charged, such as out-of-state purchases. Use tax prevents avoidance by buying across state lines.
Economic Nexus
A US sales-tax concept where a business must register and collect tax in a state once its sales or transactions there exceed set thresholds, even without a physical presence. It expanded sharply after the Wayfair decision.
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