LLC Tax Planning in Manassas, VA
LLCs are flexible—but that flexibility creates confusion. Many LLC owners don't realize that LLC is a legal structure, not a tax classification. Your tax treatment is a separate decision, and you have options.
At Hollins & Hur, we help established small businesses across Northern Virginia and DC understand their LLC tax options, evaluate whether S-Corp election makes sense, and implement the right strategy. S-Corp election is not always right—we help you evaluate profit level and payroll readiness before recommending anything.
Book a Tax Fit CallLLC Tax Planning — What It Really Means
Here's what confuses most LLC owners: LLC is a legal structure; tax treatment is separate. When you form an LLC, you get liability protection—but the IRS doesn't recognize "LLC" as a tax category. Instead, your LLC is taxed based on its classification:
- • Single-member LLC: Taxed as sole proprietorship (Schedule C)
- • Multi-member LLC: Taxed as partnership (Form 1065 + K-1s)
- • LLC with S-Corp election: Taxed as S-Corp (Form 1120-S)
- • LLC with C-Corp election: Taxed as C-Corp (Form 1120)
What LLC tax planning clarifies: Which tax classification is best for your situation. This depends on your profit level, how you want to pay yourself, whether you're ready for payroll, and your state tax implications.
Key insight:
You don't have to change your LLC structure to change how it's taxed. You can keep your LLC intact and simply elect different tax treatment. This is what S-Corp election does—you stay an LLC for legal purposes but get taxed like an S-Corp.
Who This Is For
LLC tax planning is especially valuable if you fit any of these profiles:
What's Included in Our LLC Tax Planning Service
We don't just tell you to "become an S-Corp." We help you understand the full picture:
The Big LLC Decisions We Help You Make
LLC tax planning involves several interconnected decisions. Here are the key areas we evaluate:
LLC vs S-Corp Election
The most common question: should my LLC elect S-Corp status? The answer depends on your profit level, payroll readiness, and whether the tax savings justify the added complexity.
S-Corp election is not always right. If your profits aren't high enough, or you're not ready to run payroll, S-Corp can actually cost you more in compliance than you save in taxes. We model the actual numbers before recommending anything.
Owner Draw Strategy
How you pay yourself as an LLC owner depends on your tax classification. Default LLCs take "draws" (subject to self-employment tax). S-Corp LLCs take salary plus distributions (different tax treatment for each).
We help you understand the tax implications of how you're taking money out of the business and optimize your approach based on your classification.
Quarterly Estimated Taxes
LLC owners are responsible for quarterly estimated tax payments on their pass-through income. Many LLC owners forget this and get hit with underpayment penalties at tax time.
We help you project your quarterly payments based on actual performance and coordinate them with your overall tax strategy.
Quarterly Estimated Tax PlanningYear-End Planning
Year-end is critical for LLC owners. It's your last chance to make retirement contributions, time expenses, and take other actions that affect your tax bill. If you're considering S-Corp election for next year, year-end is when to make that decision.
Year-End Tax PlanningMulti-State & DC Considerations
If you operate across Virginia, DC, and Maryland, your LLC may have filing requirements in multiple jurisdictions. DC has a franchise tax that applies to LLCs. Virginia and Maryland have pass-through entity tax elections.
We help Northern Virginia LLC owners navigate multi-state complexity and understand their obligations.
Multi-State & DC Tax PlanningCommon LLC Tax Issues We Help Prevent
We see these LLC issues repeatedly. Here's what trips up most small business owners:
Our LLC Tax Planning Process (3 Steps)
Tax Fit Call & LLC Assessment
We start with a call to understand your LLC—structure, current tax treatment, income patterns, and goals. If your books aren't current, we'll discuss cleanup first—accurate numbers are essential for accurate modeling.
Tax Classification Modeling
We model different tax elections using your actual income and expenses. You'll see side-by-side comparisons: current treatment vs. S-Corp election vs. other options. We include compliance costs so you see the full picture—not just tax savings.
Recommendations & Implementation
You get written recommendations with clear rationale. If a change makes sense, we help you implement—filing elections, setting up payroll (for S-Corp), coordinating with your attorney. If staying with current treatment is best, we'll tell you that too.
If Your Books Aren't Tax-Ready, We Fix That First
Accurate LLC tax planning requires accurate numbers. If your books are behind or messy, we can't model different tax elections reliably—we'd just be guessing, and guessing leads to bad decisions.
Here's our approach: If your books aren't current, we make them tax-ready first before providing final recommendations. This ensures our tax classification modeling is based on real data.
This might mean a quick cleanup, or it might mean more substantial catch-up work. Either way, we'll be upfront about what's needed.
Once your books are clean, we can move forward with LLC planning and seamlessly coordinate with tax return preparation when the year closes.
FAQs About LLC Tax Planning
How is an LLC taxed by default?
Single-member LLCs are taxed as sole proprietorships (Schedule C on your personal return). Multi-member LLCs are taxed as partnerships (Form 1065 with K-1s). However, LLCs can elect to be taxed as S-Corps or C-Corps if it makes sense for your situation.
Should my LLC elect S-Corp taxation?
Maybe—but not always. It depends on your profit level, whether you're ready to run payroll, and if the tax savings outweigh the added complexity and cost. We model the actual numbers for your situation before recommending anything.
What's the difference between an LLC and an S-Corp?
LLC is a legal structure that provides liability protection. S-Corp is a tax election that determines how your income is taxed. An LLC can elect S-Corp tax treatment—you keep the LLC structure but change how the IRS treats your income.
Do I need to change my LLC to benefit from S-Corp taxation?
No. You keep your LLC intact. You simply file Form 2553 with the IRS to elect S-Corp tax treatment. Your operating agreement and liability protection stay the same.
When is the deadline to elect S-Corp status?
Generally within 75 days of the start of the tax year you want the election to apply. However, late elections are sometimes possible with reasonable cause. We can help you navigate the timing and filing requirements.
What if I'm not ready for payroll but want to save on self-employment tax?
If you're not ready to run payroll (which S-Corp requires), S-Corp election probably isn't right for you yet. We can help you prepare for a future S-Corp election while optimizing your current LLC tax situation in other ways.
How do I know when my LLC is ready for S-Corp election?
Generally when your net profit is consistently above $50-60K, you can pay yourself a reasonable salary, and you're comfortable with payroll compliance. We'll evaluate your specific situation and tell you honestly if it makes sense—or if you should wait.
Related Tax Planning Services
LLC tax planning connects to several other services. Explore related options:
Ready to Optimize Your LLC Tax Strategy?
Stop wondering if your LLC is set up right for taxes. Book a tax fit call and we'll evaluate your current treatment, model your options, and help you make an informed decision. LLC tax planning in Manassas, VA starts with a conversation.
Book a Tax Fit Call