Comment by akcreek

So still an LLC, but it is taxed like an S-Corp when this election is made. This allows an owner working in the business to be an employee and take a reasonable salary. W2 income is subject to FICA taxes, but all the other profits in the business pass through to the owner as usual for an LLC, but aren't subject self employment tax or FICA. You still pay regular income tax though. This is all at a federal level.