What is an LLC Tax Election?

An LLC tax election is how you tell the IRS how your LLC will be taxed.  The federal government does not recognize an LLC as a classification for federal tax purposes, so you have to make an election on how your LLC will be taxed, i.e.  a sole proprietorship, a partnership an S corporation etc.  The LLC election is made by filing Form 8832.  Your election is entered on line 8.  If the LLC does not enter a date, the election will be in effect as of the form’s filing date.  Your election cannot take place more than 75 days prior to the date that you file the LLC.  The LLC cannot make the election effective for a date that is more than 12 months after it files Form 8832. However, if the election is the “initial classification election,” and not a request to change the entity classification, there is a possibility for a late election.