LLC AS DISREGARDED ENTITIY

Forum|Forum|1 year ago
March 1, 2025
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My wife and I have an LLC which I understand can be considered a disregarded entity. In the Business software I chose US Limited Liability Partnership. My business is in PA and I reside in NC. I completed the 1065 and PA S Corporation/Partnership Return , and the result was that I owed a PA tax - about 1.5% of profits. As a disregarded entity I understood I would file a PA Non Resident Individual Tax return - one for me and one for my wife but there would not be a tax for the PA S Corporation/Partnership filing. ie like the federal, taxes would be paid on our individual return. Should I have chosen US General Partnership in order to be considered a disregarded entity ?

Best answer by PatriciaV

A Limited Liability Partnership is not the same as an LLC (Limited Liability Corporation). However, that in itself shouldn't have caused state taxes to be assessed on the LLC.

Did you indicate that the partnership would pay the state income taxes on behalf of the partners? If so, that would create a tax liability for the LLC. Otherwise, the income should flow to the partners individual tax returns (via Schedule K-1).

You might go back through the PA interview for the business return in case you need to change your settings for how tax on income is paid.

PatriciaVAnswer

Employee

A Limited Liability Partnership is not the same as an LLC (Limited Liability Corporation). However, that in itself shouldn't have caused state taxes to be assessed on the LLC.

You might go back through the PA interview for the business return in case you need to change your settings for how tax on income is paid.

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