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Disregarded Entity Definition

Disregarded entity is an ownership option for single-member LLCs (limited liability corporations) with regard to business entity tax obligations.

Disregarded Entity Expanded Definition
A single-member LLC can file with the IRS as either a corporation or as a disregarded entity. In some states, married owners of a two-member LLC may also have the option of designating the business as a disregarded entity with the IRS.

When an LLC files taxes with the IRS as a disregarded entity, payments are made as part of the owner(s) personal tax report instead of as a separate corporation. See the IRS website for information about required IRS forms.

Last Updated By

Rachel Blakely-Gray | Apr 17, 2023

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