Ryan VaughnCOO of Incite Tax & Accounting. Ask me anything about your taxes.

Legal Business vs Tax Structure - Full YouTube Video Recap

10 Jul 2023 · 1 min

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0:50

In this brief instructional segment, the presenter clarifies the distinction between a legal entity and a tax status, emphasizing that a business can be formed as a legal entity (e.g., an LLC) and then choose among various tax classifications. The LLC may be taxed as a sole proprietorship, partnership, or S corporation. The presenter notes that an S corporation is solely a tax status, requiring an IRS election form (not a state filing), and warns viewers to consult an attorney for personalized advice. The tone is informal and includes a critical aside about the IRS, along with typical YouTube engagement prompts.

Chapters

What is the difference between a legal entity and a tax status? Now, as always, remember to check with your attorney on your specific situation. For the sake of this video, what you have is I can set up an entity with the state, and that could be taxed under a variety of different ways. For example, if I set up an LLC, that could be taxed as a sole proprietorship, which is a tax status. It could be taxed as a partnership. It could be taxed as an S corporation. In order for it to be an S corporation, which is tax status only, I need to Let the IRS know using a form that says, I want my LLC to be taxed as an S corp. You can't go to your state and set up an S corp. It's a tax status only. Remember to like, share, comment, ask questions. We want to support you. And remember, the IRS sucks and they don't like you. I'm sorry to tell you that.