If you haven’t yet filed your tax return (and this year is the year you probably REALLY want to extend it due to all the uncertainty with 2009 tax law), you can still select how you want your LLC to be taxed.  

So, for example, let’s say you have a single member LLC and you just read the announcement on this site that the number of IRS audits of Sole Proprietorships is going up to 1 in 3.  You can avoid all that by electing S Corporate tax treatment.  But you didn’t do it yet for 2008.  It’s not too late.  Make sure you have a qualified tax preparer help you with this, though.

The IRS is gearing up for the next onslaught of audit attacks.  This time they’re after Sole Proprietorships aka Schedule C filers.  Remember if you have a Single Member LLC and have NOT elected how to be taxed for your business, you’re going to default right into the Sole Proprietorship category.

Based on the number of auditors moved over to this task force, you can figure that about 1 in 3 Sole Proprietorships is going to get tagged for audit.  If you have a Sole Proprietorship now or an LLC that is taxed as one, change it!