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what is an LLC allocation versus a distribution hi Im Julie Merrill Im the paddle boarding CPA and I help entrepreneurs to clarify automate and accelerate their business back-office so that they have more time in life to enjoy their passions together we can work smarter and live harder allocations and distributions are two terms youre going to hear often in LLCs and so Im going to walk you through both of them LLCs dont file their own tax returns they are considered pass-through entities where the taxable income passes through to the members or owners personal tax returns so in general all of your LLCs earnings are going to be allocated not given in cash but on the books allocated to each of the owners or members equity accounts so for example if your LC makes $200,000 in one year and you have two equal members or 50% owners they would each get 100,000 allocated to them for those tax years now there are some exceptions to those total dollar amounts and if you are our taxes and