Starting a new business. Already have a license as an LLC in state of VA. Wondering, if I apply for my EIN w/2 people in the company, the IRS site is saying I am a partnership, I can elect Corporate status meaning I file a corporate income tax return for your Limited Liability Company OR I can elect S Corp. Does the latter mean I have to change my LLC to an S Corp? Thanks in advance,
No, you do not need to change your Entity Status into an S corporation but, the IRS provides you with an option to be treated as an S Corporation or as a Partnership for tax return purposes.
The IRS would allow you to remain as an LLC but you can elect to be treated as a S Corporation for tax purposes. Thus, you would be filing a Form 1120 S Corporation Tax Return (or file a Form 1065 Partnership Form if you wish to be treated as a Partnership).
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