Not sure how your LLC should file? We'll sort it out with you.
Disregarded entity LLC: see how yours is taxed.
Answer four questions. Then we say whether this tax setup still fits.
There is one company, and the profit goes on your return.
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Disregarded Entity LLCWhat it means and how it files
A disregarded entity LLC is a one-owner LLC that the IRS looks through for income tax, so the profit goes on the owner's return. The LLC still exists, keeps its own bank account, and uses its own EIN for payroll. Steven Palmieri, a Tax CFO, can keep the books, set payroll up and prepare that return for you.
Disregarded only means the IRS taxes the LLC's profit on your return.
Get help with your disregarded entity LLC
The practice is in Dallas and works with owners anywhere by video. The video call runs 30 minutes, at no cost to you.
You will be talking to the Steven Palmieri practice.
What a Tax CFO does for a one-owner LLC
A bookkeeper records what happened. A Tax CFO also helps you plan what comes next: whether staying disregarded still fits, when an S corp election would pay off, and what to set aside for quarterly taxes. We keep your books current, so those answers come from your real numbers.
Six papers owners ask about. Open the one you have.
Tap a paper to see what it means for your LLC.
1Your state certificate
Your state certificate
Your state certificate is the paper that created the LLC. It stays valid when the IRS taxes the profit as yours.
Keep it handy for the call. We start by checking the exact name the state has on file.
2No election on file
No election on file
With one owner and no Form 8832 or Form 2553 on file, the IRS treats a U.S. LLC as a disregarded entity for income tax.
Not sure whether a form was ever filed? Tell us on the call, and we'll help you find out.
3The EIN letter
The EIN letter
The IRS letter that assigned the LLC its EIN is often called a CP 575. Your income tax return uses your own number. Payroll and certain excise tax returns use the LLC's EIN.
Have the EIN letter handy if you still have it, and we'll show where each number belongs.
4Your own return
Your own return
The LLC's profit goes on your Form 1040: Schedule C for a business, Schedule E for a rental, Schedule F for a farm.
Bring last year's return. We'll point to the schedule that carries the LLC.
5Quarterly estimates
Quarterly estimates
Because the profit is yours, you may owe estimated tax four times a year: April 15, June 15, September 15 and January 15.
Bring last year's payment records. We'll help you work out what this year's payments should be.
6A lender's request
A lender's request
Some lenders ask for audited or reviewed statements. Those come with a signed report from an outside accounting firm.
Bring the lender's letter. We keep your books ready so that firm can start fast, and we stay on the monthly work.
Steven Palmieri is the person on the call. He works as a Tax CFO, and owners also know him as the Entrepreneur's CFO. He'll look at how your LLC is set up, how it files, and what it owes, and explain it in plain words.
Tell us a little about your LLC. On a free 30-minute call we'll tell you how it's taxed today, which returns it should be filing, and whether a different election could save you money.
Ask about your LLC
The company name and one line about your question are enough to start.
You will be talking to the Steven Palmieri practice.
Disregarded entity LLC: the plain answer
A disregarded entity is a business the IRS does not treat as separate from its owner for income tax. Most often it's an LLC with one owner that never elected to be taxed as a corporation. That is the IRS default for a one-owner LLC, so many one owner LLCs are disregarded even though the owner never chose that.
Under state law, the LLC is still its own company. It keeps its name, its bank account and its contracts. Only the federal income tax treatment passes through to you.
How a disregarded entity LLC files its taxes
If you own the LLC personally, its income and expenses go on your Form 1040. A business goes on Schedule C. A rental goes on Schedule E. A farm goes on Schedule F. The LLC itself files no federal income tax return.
If a corporation or a partnership owns the LLC, the LLC is reported on the owner's return as a division of that company. So a corporation that owns a one-member LLC includes the LLC's profit on its own corporate return.
If you run a trade or business through the LLC, you also owe self-employment tax on the profit, the same way a sole proprietor does. That is 15.3% for Social Security and Medicare, figured on Schedule SE. A rental on Schedule E usually stays outside self-employment tax.
A second owner changes the default: the LLC is then taxed as a partnership, unless it elects something else. Spouses who own an LLC as community property in a community property state, such as Texas, can choose to treat it as disregarded or as a partnership.
What the IRS still treats as the LLC's own
Payroll comes first. For wages paid after January 1, 2009, the LLC is treated as a separate entity for employment taxes. It reports and pays employment taxes under its own name and EIN, not yours.
Certain excise taxes work the same way. For excise taxes after January 1, 2008, returns such as Form 720 and Form 2290 use the LLC's name and EIN.
State rules come third, and each state sets its own. In Texas, for example, a one-member LLC is still a taxable entity for the state franchise tax even though the IRS disregards it. Your state may also want its own annual report and registration.
When a disregarded entity LLC needs its own EIN
It needs an EIN if it has any employees, or if it has to file one of the federal excise tax returns. Without either, the IRS says the LLC can use the owner's name and taxpayer number for federal tax.
Many owners get an EIN anyway. Most banks ask for one to open a business account, and some states require one. Getting an EIN does not change how the LLC is taxed. The profit still goes on your return.
How to change it: Form 8832 or Form 2553
An LLC that wants C corporation tax treatment sends the IRS Form 8832. The election can take effect up to 75 days before the filing date, or up to 12 months after it.
To be taxed as an S corporation, the LLC files Form 2553 and skips Form 8832. For the election to count for this year, file it within 2 months and 15 days after the year begins, which is March 15 for a calendar year. An election filed during the prior year also counts for the year that follows.
Missed the date? The IRS offers late election relief in many cases, generally within 3 years and 75 days of the date you wanted the election to start. Once you change your classification by election, you generally have to wait 60 months to change it again.
With an S corp election, an owner who works in the business takes a reasonable salary through payroll. Profit beyond that can come out as distributions, which carry no self-employment tax. We help you pick a salary that matches the owner's real work.
The W-9 question
A customer asks your LLC for a W-9. Put your own name on line 1 and the LLC's name on line 2. On line 3a, check the box for your own tax classification, which is usually individual or sole proprietor.
For the number, enter your Social Security number, or your own EIN if you have one as an individual. The W-9 instructions say a disregarded LLC uses the owner's number, not the LLC's EIN.
If the LLC has elected to be taxed as a corporation, the LLC's own name and EIN go on the form instead.
A worked example
Here's a made-up example to show how the pieces fit. Dana owns an LLC by herself. She runs a design studio, never filed Form 8832 or Form 2553, and earned $80,000 of profit in 2025. Your numbers will differ.
Income tax: the LLC files no income tax return of its own. Dana reports the $80,000 on Schedule C of her Form 1040.
Self-employment tax: she figures it on Schedule SE. $80,000 times 92.35% is $73,880. At 15.3%, that is about $11,304 of Social Security and Medicare tax. She deducts about half of it, roughly $5,652, when she figures her income.
Quarterly payments: if she expects to owe $1,000 or more when she files, she pays estimated tax on April 15, June 15, September 15 and January 15. Paying 100% of last year's tax over those four dates generally avoids a penalty (110% if last year's adjusted gross income was over $150,000).
Payroll: when she hires her first employee, the LLC files the payroll returns under its own name and EIN, even though the profit still goes on her return.
The W-9: a client asks for one. Dana puts her own name on line 1, the LLC's name on line 2, checks the individual box on line 3a, and enters her Social Security number (or her own EIN, if she has one).
If her profit keeps growing, an S corp election may lower her self-employment tax. On a free 30-minute call we run that comparison with your real numbers.
Quick answers owners ask
Is my LLC still protected if it is disregarded? The tax label does not change the LLC's legal standing. Whether the LLC shields your personal assets depends on state law and how you run it, which is a question for your lawyer.
Can a disregarded entity LLC lose money? Yes, and the loss goes on your return too, where it can offset other income within the usual IRS limits.
Should a one-owner LLC keep its own bank account? Yes, we recommend one. A separate account keeps the books clean and helps show the LLC is its own company.
