A Disregarded Entity is an IRS classification in which a business is considered separate from the owner for liability purposes, but is considered the same as the owner for tax purposes.Â
A Disregarded Entity pays federal income taxes through the personal income tax return of the business owner.Â
A Single Member Limited Liability Company (LLC) is a separate entity for liability purposes. Â
A Single Member LLC that elects not to be taxed as a Corporation is a Disregarded Entity.
C Corporations, S Corporations, multiple member LLCs, Limited Partnerships and Limited Liability Partnerships are NOT considered to be Disregarded Entities.