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Level 5
posted Oct 5, 2023 11:39:27 AM

Is a single member LLC a sole proprietorship or an individual (Paypal Business)

I'm not sure which option to select.

 

As I've read it can be either.

 

And they used to put Individual/SoleProprietor as the option. Now it's separate.

 

So not sure which one to select (no I haven't made any election to S-Corp etc) Just a standard basic Single Member LLC Thanks!

0 5 2360
5 Replies
Level 15
Oct 5, 2023 11:42:19 AM
Level 15
Oct 5, 2023 11:46:45 AM

Where is it asking you to pick one?  On Turbo Tax?  They should be the same.  It shouldn't make a difference which one you pick.  Maybe Turbo Tax will ask different questions based on which you pick.  But that shouldn't affect your tax return.   

Level 15
Oct 5, 2023 11:52:20 AM

A single-member LLC is disregarded for tax purposes. so it would seem it doesn't matter whether you select individual or sole proprietor

New Member
Oct 5, 2023 2:53:11 PM

A sole proprietorship is a business owned by a single individual person.  The business name (if any) is a substitute for the person's name (and is sometimes called a "fictitious name".  All liabilities, including judgements, of the sole proprietorship business are also liabilities of the person.  Corporations (including LLCs) are used, in part, to shield owners, including a sole owner,  from being personally liable for for many types of liabilities of the business.  

Level 5
Oct 5, 2023 2:56:18 PM

I'm leaning towards selecting individual. What is categorized under individual? 

 

I'm confused as to what the difference is? Thanks!