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What can cause double taxation for LLC owners?

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What can cause double taxation for LLC owners?
October 24, 2025
Author: NCH

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Earning dividends can cause double taxation for LLC owners. It starts when a business pays the taxes on its annual profits and distributes dividends to its shareholders. Then, shareholders pay taxes on the dividends they receive.

Other causes of double taxation may include not electing S corporation status or failing to separate business and personal finances.

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