Single Member LLC with both spouses

[Adrian Brown]

I understand that me and my wife can both be on our Texas LLC, and we can still file as a Single Member LLC so that we have a disregarded entity from a tax perspective, but we still have the liability protection. In fact, Senate Bill 2314 went into effect 9/1/2023 for this scenario. My question is, is there something a person must do when forming the LLC to designate the status of "Single Member" so that we have pass-through for income/losses instead of a partnership with K-1 documents, or is this "Single Member" status just something we tell our CPA during tax time so they know to treat all income/losses?

[Mitchell Zoll]

Quote from @Adrian Brown:

Quote from @Mitchell Zoll:

Single Member LLCs have generally had the same protections as "multi-member" LLCs in Texas before the bill. (Senate bill 2314 was a clarifying bill in response to attempted charging orders of an LLC in a divorce case. You can see the case is cited in the bill analysis). But to answer your question, the election you need to make for tax purposes is with your CPA. First work with your lawyer to make sure your LLC & Company Agreement are set up to support the election (equal distributions, single class of member, etc.), but then your CPA can work on filing the election with the IRS.

 @Mitchell Zoll I've got the LLC formed as of yesterday, and I'm filing for my EIN on the IRS website, and they have it very clear with regards to husband & wife in a community state and still declaring the Single Member status. However, I do not have an attorney as it relates to the Operating Agreement, is this part of your practice and if so, maybe we can have a call to understand your cost to create a proper OA, thoughts?

@Adrian Brown - Yep!  Sent you dm with my information. Feel free to reach out if I can help!