LLC Partnership is not exempted from state taxation. Though there are many arguments on this matter, we will be discussing the basics of whether an LLC Filing as Partnership status will be advantageous or disadvantageous to you. In most cases, an LLC Filing as a Partnership will not create any additional financial liability on your part; it only reduces the personal tax burden and provides you with peace of mind. However, one major drawback is that your business partners are not exempt from backup withholding (or C withholding), which means they will still have to pay taxes on their income even if they are not in your company.
Once you have decided whether or not an LLC Filing as Partnership is beneficial for you and your business, then you need to make sure you obtain the correct taxpayer identification number (tin) and the appropriate corporate documents to file. The first step is to determine which state you will file your business operations and address with. Each state has its own regulations and publications specific to its particular filing requirements, so it is advisable to check with your state tax agency for the applicable rules and regulations before completing the process.
