Step 4 of 5
Decide how your business is going to be taxed. LLC’s are beautiful because of their flexibility. LLCs are confusing because of their flexibility. How many owners are in the LLC is what determines their taxability. With one owner your choices are reporting the income on Schedule C or E on your personal return, or electing to have the LLC taxed as a corporation. Then it can get one more level of complexity as you can elect to be a Subchapter S corporation passing the gains through to your personal return, but still filing a separate return for the business. LLCs with two or more members are a partnership by default but may also elect corporate or S-corp status, and if the only members are a married couple they also may elect to be treated as a joint venture and not file any separate returns.