Lawrence Blau & Associates, LLC © ALL RIGHTS RESERVED. 

By default, an LLC is considered a pass-through entity, similar to a sole proprietorship or partnership.  This means that the business does not pay income taxes on its profits, but the profits or losses are passed through to the owners.  

  • The owners are called members and the members' personal assets are protected from the business.  The members must pay taxes on their share of the profits, whether or not the money stays in the business or is distributed to them.  
  • An LLC can make an election to be taxed like a corporation or a Sub-Chapter S Corporation (or “S” corp).  
  • LLC members are not employees, but LLC members who are active in the business, need to pay self-employment taxes on their share of their profits.  Also, LLC members who are active members, are able to deduct their share of the business’s losses on their personal returns and use the losses to offset other income.  
  • Favorable retirement plans are available.

Limited Liability Company or (LLC)

Business Formations:

Understanding Personal Liability & Various Tax Treatments

LLC Image
LAWRENCE BLAU & ASSOCIATES, LLC TAX SERVICES, ACCOUNTING AND FINANCIAL ADVISORY SERVICES

Lawrence blau & associates, llc

914-941-5533

info@LawrenceBlau.com

​6 Sleator Drive, Ossining,  NY 10562

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