Can a married couple LLC be filed as a disregarded entity for tax simplification?

Thanks, that's helpful! But I'm in Florida which isn't a community property state. Does that mean I have to file Form 8832 to be treated as a disregarded entity? And what about the fact I already told the IRS we were a multi-member LLC when getting the EIN? Do I need to get a new EIN if we change to being treated as a disregarded entity?

Since you're in Florida (not a community property state), you have a few options. You can still elect to be treated as a "qualified joint venture" which allows spouses to avoid partnership treatment. You'd report the business on your joint return with each spouse filing a separate Schedule C for their share of the business. You don't need a new EIN if you change your tax classification. Your LLC can keep the same EIN, but you'll need to file Form 8832 to elect to be treated as a disregarded entity. Since you initially selected multi-member treatment, the IRS currently considers you a partnership by default, so the form would formalize your desire to be treated differently.

How does it work with state tax filings? My wife and I have an LLC in Texas and we're trying to figure out if changing our federal classification affects state filing requirements too.

I'm hesitant about these online tools. How accurate is the info compared to what a CPA would tell you? I've been burned before by tax software that missed important details for business owners.

The tool actually addresses state-level implications when you input your location. For Texas specifically, it would show how your federal classification choice impacts your state obligations, including franchise tax requirements that vary based on your federal tax treatment. As for accuracy, I was skeptical too initially. The difference is taxr.ai isn't just generic software - it actually analyzes your specific documents and situation. I ended up having my CPA review the recommendations it gave me, and he was impressed with the accuracy. The platform is built on actual tax code and regulations, not just general advice, so it's catching all those important details that generic software might miss.

How exactly does this work? Don't you still have to wait on hold with the IRS? I don't understand how a third-party service could get you through faster than calling directly.

This sounds like BS honestly. Nothing can get you through to the IRS faster. They have one phone system and everyone has to wait in the same queue. Is this just some service that calls for you and then charges a fortune when they get through?

It's actually using a technology that navigates the IRS phone tree and holds your place in line. When they reach a human representative, you get a call to connect with that person. So you're not waiting on hold - they are, and they notify you when someone's available. The system uses the same public IRS phone lines everyone else uses, but it handles the waiting part for you. That's why it's so helpful - you don't have to sit there listening to hold music for hours. And they're transparent about how it works in that video I linked, which shows the whole process.

Could you elaborate on the special allocations part? My husband and I have an LLC but he works in it full time while I only do about 10% of the work. Can we allocate income differently than our ownership percentages if we stay as a partnership?

Yes, that's exactly the kind of situation where partnership treatment might be beneficial. As a partnership, you can allocate income in a way that doesn't strictly match ownership percentages, as long as you have what the IRS calls "substantial economic effect" - meaning there's a legitimate business reason for the allocation. So if your husband does 90% of the work, you could potentially allocate more of the income to him. When you're a disregarded entity or using the qualified joint venture election, you generally have to split everything based on ownership interests. So if you own 50/50, each spouse would report 50% of the income, regardless of who did more work in the business.

Disregarded" entity only refers to how the business is treated for tax purposes. Your LLC still exists as a legal entity providing liability protection under state law. The IRS "just" disregards it for federal tax purposes and treats the income as passing directly to you, similar to a sole proprietorship. So you keep all your liability protection!'It s just a tax classification that determines what forms you file. This separation between legal status and tax status is one of the benefits of an LLC - flexibility in how'you re taxed without changing your legalstructure.

This is exactly what I needed to hear! Thanks for sharing your real experience with the process. Quick question about the deadline for Form 8832 - do you remember what the specific deadline was? I want to make sure I don't miss it like you almost did. Also, did you have to notify your state about the federal tax classification change, or was that automatic once you filed the federal form?