Where will the current period income for Engineering For Kids be included for tax purposes?
Engineering_For_Kids Franchise · 2025 FDDAnswer from 2025 FDD Document
The Company is a single-member LLC and will be treated as a disregarded entity for both federal and state income tax purposes. Accordingly, the current period income will be included on the income tax return of the member. Additionally, any adjustments determined pursuant to IRS examinations would similarly be reflected on the income tax returns of the stockholders. Therefore, no provision or liability for either current federal income taxes or the effects of IRS examinations on prior years' federal income taxes have been included in the financial statements.
Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2025 FDD)
According to the 2025 FDD, Engineering For Kids is a single-member LLC, which means it will be treated as a disregarded entity for federal and state income tax purposes. As a result, the current period income for Engineering For Kids will be included on the income tax return of the member.
This means that the profits and losses of the Engineering For Kids business will flow through directly to the owner's individual tax return. The business itself will not be subject to income tax at the entity level. This is a common tax structure for small businesses as it simplifies tax reporting.
Additionally, any adjustments determined pursuant to IRS examinations would similarly be reflected on the income tax returns of the stockholders. Therefore, no provision or liability for either current federal income taxes or the effects of IRS examinations on prior years' federal income taxes have been included in the financial statements.