Just Filed for an EIN for my LLC... should i file form 8832?

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so I just recently filed for my LLC and Ein. After I received my employee identification number, I was told that if I want to, I have the option of filing form 8832 "Entity Classification Election" and elect to be classified as an organization taxable as a corporation. It also states that if my LLC meets the qualifications for an S corporation I can file form 2553 "Election by a Small Business Corporation." If I don't file either one of these, than my LLC will be taxed as a default sole proprietorship. My question this: What is a file 8832 or file 2553? What exactly does it do to my LLC and what are the differences as far as taxes between a sole proprietorship, a corporation, and a small business corporation? I am really struggling trying to comprehend exactly what it all means, so any input or advice you have would be EXTREMELY appreciated. thanks in advance!!! By the way, not sure if this information helps,but I'm the only member in my LLC, and I do not currently own any properties or investments with it. I also am in Columbus Ohio.

Bump for this question. I just set up my LLC EIN and had the same instructions from the IRS website. One difference is my wife and I have a multi-person LLC so the IRS system defaulted us to the Partnership classification. Are there any downsides to this for tax purposes or should I file Form 8832 to be designated as a corporation?

Thanks BP for any input!

As a real estate investor, you generally do not want to be taxed as a corporation. It means double taxation (taxed once at the entity level, and once again at the individual level when distributions are made). However, now that there is a 21% flat tax rate at the corporate level, it does make sense for some businesses to be taxed as a corporation if they intend to leave the profits in the business. However, I still discourage it for buy and holds.

By filing Form 2553 (the S-corporation election), you elect to have your business' income "flow through" to your individual tax return. While there are some people who like to form an LLC, elect to have to be taxed as a corporation, and then make an S-election, I have always felt that for 99% of situations the complexity does not justify the limited potential benefits (often you arrive at the exact same result).

Finally, I found a chance to disagree (kind of) with @Brian Schmelzlen  :)  Usually I just nod and vote for his answer.

@Isaiah Williams and @Reid Hanley - my advice is to never decide on either kind of corporation, C or S, until your business is established. You don't know what will be best for your business until you see what kinds of deals you're working and what kind of numbers you're generating. Jumping the gun and choosing the wrong entity can backfire.

So keep it simple and stick to the default choice: sole proprietorship. You might change it later if warranted.

Reid - even though yours defaulted to the partnership, you will most likely be filing it as a disregarded entity / sole proprietorship anyway, i.e. no separate tax return. The best thing is of course to discuss it with your accountant.