Entities That Can Use. Sole proprietors (not an entity, just a single individual doing business) and limited liability companies (one owner only-individual or an entity) may select this type.

Main Characteristics. There is no separate taxation, and no separate tax return. For an individual, the information about the business’ transactions is placed mostly at Schedule C (or E). For a single owner limited liability company, if the owner is an individual, the information about the business’ transactions is placed mostly at Schedule C (or E); if the single owner is an entity, the business’ transactions are "added to" the same ones for the parent, and entered on the parent’s return.

Uses. This form of taxation is used for its simplicity, which also means reduced cost.

This memorandum contains general information and while the information presented is accurate as of the date of its publication, it cannot be relied upon as legal advice, as that can only be obtained through personal consultation with an attorney with whom you share your specific facts.

 Copyright © 2005 by Sterling A. Minor. All Rights Reserved.

Last Updated: May 17, 2005