At the risk of sounding like an idiot

[Unregistered]

If a single member LLC elects to be taxed as a S Corporation, do you then file the 1120S as if the business is incorporated, even though it is really not?

I'm confused and I have researched this over and over. If you ask 10 different people what a LLC is, you get 100 different answers--figure that one out.

Hep me.

[Bird Legs]

Llc

If a single member LLC elects to file as an S Corp. then it will prepare and file a form 1120S. No approval by the IRS required.

[Armando Beaujolais]

Agree.

Just to be clear, the election requires filing Form 2553.

[Unregistered]

This is interesting because typically a single member LLC is considered a disregarded entity, but the earnings would be subject to SE tax, correct?

If that's the case, the single member LLC elects to be taxed as S Corp and then the earnings are subject to ordinary income tax on the individual return.

Does the IRS have the same requirements for a single member LLC taxed as a S corp to pay a "reasonable wage", in this case to its member?

[JoshinNC]

Yes,

Once the LLC elects "S" status it is bound by all of the "S" rules. It ceases to be a disregarded entity upon the filing of the 2553.

[Snaggletooth]

Decision Tree

I've been under the impression that a single member LLC would be taxed as
a proprietorship. Guess I was wrong.

I would love to see a decision tree with regard to LLCs. A simple chart with the
"yes" and "no" boxes and arrows. It could probably be displayed on a single page, or if
someone could post it as an attachment in an excel format or notepad format.

[rosieea]

I've been under the impression that a single member LLC would be taxed as
a proprietorship. Guess I was wrong.

You're not wrong. A single member LLC is taxed as a proprietorship, unless it ELECTS to be taxed as a corporation.

[Uncle Sam]

Llc

This really bugs me.
For the last decade, there seems to be a notion that an L L C is a magical buzz word that everyone is supposed to understand and clears all tax ills simultaneously. As soon as a client discusses an L L C I'm supposed to automatically understand what's being said.

ALL an LLC is, is an entity set up for LEGAL issues - NOT TAX issues.

Tax issues are a completely different ball field.

The very first question I ask a client who discusses an L L C formation, is, what is it going to be - a proprietorship, partnership, or corporation? These clients don't know the difference. It's just a fancy term they hear, and think they know it all.

[Snaggletoof]

Wake the Dead!

Geez Sova, where you been! Good to have you back!

I've been floundering around in total ignorance asking dumb questions on this board, and have found that the usual know-it-alls haven't been able to help me much. Now that you're back you can join company with them. The more the merrier!

...truth of the matter, the more the better to help me with my dumb questions...