Are Form 8865 Entity 2024

Hi, my name is Keith Hall. I'm a CPA and I work exclusively with small businesses just like you. One of the questions you're going to have to answer is what form of organization you're going to operate your new business as. You have options such as a corporation, an LLC, partnership, or sole proprietor. Each option has its own pros and cons, so let's focus on the LLC (limited liability company) in this discussion. The LLC is a relatively new form of organization that is very popular these days. It combines elements of a sole proprietorship, partnership, and corporation. One of the main benefits of an LLC is that it can limit the liability that you could personally face. For example, if there is an accident in your business that results in a lawsuit, operating as an LLC can provide some protection for your personal assets. However, forming an LLC requires some additional steps. You need to file paperwork and pay fees with your state's Secretary of State. These documents, called articles of organization, can be filled out on your state's website. Additionally, an LLC needs to maintain its status with the state by filing paperwork and holding annual meetings. This maintenance can be more cumbersome compared to a sole proprietorship or partnership. From an IRS standpoint, the LLC is not recognized as its own taxable entity. Instead, you have to choose how you want to be taxed as an LLC. If you're the only owner, you can choose to be taxed as a sole proprietorship or a corporation. Most small business owners opt for sole proprietorship taxation to avoid double taxation. If there are at least two members in the LLC, it can choose to be taxed as a partnership or a corporation. Overall, the LLC offers the benefits of limited...