USA LLC is mutually exclusive of S or C Corp, Partnership, right?

[Seeeker]

Hi, I am setting up a seller account with an online retailer, and it has begin asking me for tax information.

I have an LLC registered, with an EIN number.

So I tell it I am an LLC. It then forces me to select if I am an S corp, C Corp, or partnership.

My understanding is that these entities are all mutually exclusive? How can I be an LLC and an S Corp? Or LLC and a C Corp. I am definitely not a Partnership.

Very confused, thanks for any clarification.

 

[DTA93433]

There is no recognition in tax law (per se) for an LLC. For tax purposes, an LLC (Limited Liability Company) is classified depending on how many members it has (according to its Articles of Organization). If the LLC has a single-member; then it's a single-member llc. If it has more than one member it is a multi-member LLC. For a multi-member LLC, it's default classification is that of partnership. A multi-member LLC, may opt, however, to elect classification as a corporation. It can elect classification as a C-corp by filing Form 8832 or as that of an S-corp by filing Form 2553. In a single-member llc, the entity may also elect to be classified as a corporation. If it does then it would file the same Forms as that of a multi-member, llc. For a single-member llc, it's default classification is usually that of a sole proprietor which files a Schedule C. A single-member llc is considered to be a "disregarded entity" which means that - for tax purposes - no distinction is made between the individual taxpayer and the entity itself.

 

[Seeeker]

OK thank you for the detailed reply.

 

[DTA93433]

It sounds like your an single-member LLC. Most likely you'll want to file a schedule C. What it sounds like their are asking you for is to file a W-9. A W-9 is used to file (if necessary) an information return (such as a 1099) at year-end. The W-9 will ask for the entity name, address, and EIN #. Use your EIN# (if you have one from the IRS) and select "single-member, llc" on the W-9. Sign and date and send it in. Hope this helps.

 

[Seeeker]

Yes - the end result of them asking me some basic tax information was showing me the W-9.

Again just describe my original question, I was confused because when I answered that I was an LLC, then they asked me (forced me to choose) which kind: S Corp, S Corp, Partnership. I thought those were all distinct entities, not a subgroup of LLC. An A Corp is a corporation right? A C Corp is a corporation right? An LLC is an LLC.
Not the end of the world I'm trying to understanding and do things right.

 

[DTA93433]

I think the problem here is trying to compare an LLC with a corporation and/or partnership.

Take corporations and partnerships for example. A corporation and/or partnership are separate legal entities normally created by State law. The Code also recognizes, as a separate tax entity; both partnerships and/or (C) corporations.

However, that is not the same when it comes to LLC's. With an LLC is (as I mentioned earlier) - it exists as its own (State) legal structure - but there is no tax law pertaining to LLC's. So for tax purposes the "tax" structure of your LLC depends upon how many (LLC) members you have (single or multiple members).

A similar problem exists with S-corp. Most States (I think) don't recognize S-corp's as a separate legal structure. However, the Code does contain an election taxpayers can make for "S-corp" status.

Honestly, this can be just a little bit confusing. (I know. I get questions like this from new startups all the time. It's not as ' cut and dried ' as some may think.

 

[Taxman64]

The program is following how a W9 works look take a look at the W9 from. If you are a single member LLC you chose the sole proprietor box not the LLC box which then asks you if you are a C or S Corp or Partnership. 1099s issued to single member LLCs should be issued under the Social Security # of the sole member of the LLC not an EIN. If you are a multi-partner LLC then you would select partnership and use your EIN.