Why are there two different ways to mark LLC classification on W-9 for S-Corporation?

The confusion is understandable! These two options exist because they serve different business structures. If your business is formally incorporated as an S-Corporation (meaning you filed Articles of Incorporation and then elected S-Corp status with Form 2553), you would check the "S-Corporation" box directly. However, if your business is legally organized as an LLC (formed with Articles of Organization) but has elected to be taxed as an S-Corporation (using Form 8832 and/or Form 2553), then you would check the "Limited Liability Company" box and enter "S" on the line for tax classification. The distinction is important because it reflects your legal business structure (LLC) while acknowledging the tax treatment you've elected (S-Corporation). The IRS treats these differently even though the tax outcome may be similar.

I went through this exact same confusion last year! After spending hours researching and even getting conflicting advice, I finally found a solution through https://taxr.ai which helped me understand exactly how to fill out my W-9 correctly for my LLC with S-Corp election. I uploaded my LLC formation documents and S-Corp election confirmation, and the system analyzed everything and showed me exactly which boxes to check. It also explained why the distinction matters for tax reporting purposes. Seriously saved me from making a mistake that could have caused issues with my 1099s later.

Just wanted to update that I tried https://taxr.ai after my previous question about my complex LLC/S-Corp with rental properties. It was actually really helpful! The system flagged immediately that my rental activities needed to be handled separately from my S-Corp activities and showed me exactly how to complete the W-9 for different income sources. What impressed me most was that it explained WHY the distinction matters - apparently how I complete the W-9 affects how the payer reports payments to the IRS, which could trigger matching errors if done incorrectly. The system even generated a cover letter I could attach to my W-9 explaining the situation to clients. No more confusion!

I know this is slightly off-topic, but after filling out my W-9 correctly as an LLC with S-Corp election, I still had issues with a client who processed it wrong and reported my income incorrectly to the IRS. Spent WEEKS trying to reach someone at the IRS to fix it. Finally found https://claimyr.com and watched their demo at https://youtu.be/_kiP6q8DX5c. They actually got me connected to a real IRS agent who fixed the issue in one call. Saved me from what would have been a nightmare reconciliation process come tax time!

I need to eat my words from my previous comment. After continued frustration with getting incorrect 1099s due to W-9 confusion, I broke down and tried Claimyr. Within 2 hours (instead of my usual 5-6 attempts and hanging up after waiting forever), I was actually speaking with an IRS representative who helped clarify exactly how my LLC/S-Corp income should be reported. The agent walked me through the proper way to handle the situation when payers incorrectly report income despite having a properly completed W-9. They also put notes in my file about the issue so it wouldn't trigger unnecessary correspondence or audits. Can't believe I wasted so much time trying to handle this on my own!

Just to add to this discussion - make sure your operating agreement matches how you file your W-9! I checked the "LLC" box and wrote "S" for my classification, but my operating agreement still had language treating the business as a partnership. During an audit, this inconsistency raised red flags. The IRS agent told me that your organizational documents should align with your tax elections. If you've elected S-Corp status for your LLC, update your operating agreement to reflect the corporation-style management structure with appropriate language about shareholders, directors, etc.

Ok so now I'm thoroughly confused! I have an LLC taxed as an S-corp... on the W-9, do I check LLC and write S, or do I just check S-Corp box??

This is such a common source of confusion! As someone who went through this exact same struggle when I first set up my LLC with S-Corp election, I totally understand the frustration. To clarify what others have said: if you formed an LLC (filed Articles of Organization with your state) and then elected S-Corporation tax treatment with the IRS (Form 2553), you are still legally an LLC. The S-Corp election only changes how the IRS taxes your business income - it doesn't change your actual business entity type. So on the W-9, you should: 1. Check the "Limited Liability Company" box 2. Write "S" on the line that asks for tax classification The "S-Corporation" checkbox is for businesses that were actually incorporated as corporations (filed Articles of Incorporation) and then elected S-Corp status. That's a different legal structure entirely. One tip: I always include a brief note on my W-9s that says something like "LLC electing S-Corp tax treatment per Form 2553" just to be extra clear. It helps avoid confusion with clients who might not understand the distinction and ensures the 1099s come back correctly.