The LLC label does not tell you how a business files its taxes. A domestic single-member LLC is generally disregarded for federal income tax unless it elects corporate treatment; a multi-member LLC generally defaults to partnership treatment.
State-law liability protection has exceptions. Personal guarantees, personal conduct and failure to observe legal requirements can matter. Choose legal structure and tax classification as related but separate decisions.
An example
Hypothetical: a sole owner forms an LLC and makes no corporate election. Business activity generally still appears on the owner’s Schedule C. Forming the LLC alone does not remove self-employment tax.
Reviewed October 7, 2026. IRS reference ↗
This is a general reference. Discuss how the rules apply to your business with your tax professional.