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Single-member LLC

A limited liability company with one owner. By default the IRS disregards it, so it is taxed exactly like a sole proprietorship on Schedule C, while state law gives the owner liability protection.

What is Single-member LLC?

A limited liability company with one owner. By default the IRS disregards it, so it is taxed exactly like a sole proprietorship on Schedule C, while state law gives the owner liability protection.

Why it matters on your return

The LLC changes the legal picture, not the tax picture, unless it elects S or C corporation status. Owners who form an LLC expecting tax savings do not get any until they file Form 2553.

Example

A consultant forms an LLC and earns $150,000. Her tax return looks identical to a sole proprietor's: Schedule C and full self-employment tax. Electing S corporation status is what changes the numbers.

Does a single-member LLC file its own tax return?

Not by default. It reports on the owner's Form 1040, Schedule C. If it elects S or C corporation status it files Form 1120-S or 1120.

Source: Treas. Reg. 301.7701-3

Last reviewed September 17, 2026. Tax rules change; confirm current law before acting.

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