A disregarded entity is a tax term that refers to an entity that is ignored for federal income tax purposes. The most common disregarded entity is the single-member limited liability company (SMLLC). Unless the single member elects otherwise, the IRS disregards the LLC as an entity separate from its owner, and the owner reports the LLC’s income and deductions on the owner’s federal income tax return
. An LLC with only one member is treated as an entity disregarded as separate from its owner for income tax purposes, unless it files Form 8832
. A disregarded entity is a single-owner business entity that is disregarded by the Internal Revenue Service (IRS) for tax purposes, and the owner pays the business entity’s portion of the taxes on their own personal return
. An LLC that has one member will be classified as a “disregarded entity”
