OK a couple things, a LLC (single member) is reported on your return as part of your 1040. Many form this because of liability reasons and it is less complicated than a regular corporate return.
A Corp return (non LLC) has a separate 1120 to report income and expenses.
Both of these need to set up with your respective State ahead of time.
So you have right now a sole proprietorship, which is reported on Sch C business as part of your tax return.
Now to first question: You don't need to pay yourself a salary and net profit (business income less business expenses) from the business is your income. You will pay income tax and self-employment taxes on this net profit.
Don't worry as TurboTax does this for you.
Thank you for your help on this. How do I take advantage of the "cost of labor" option for write off's then? What do I need to do? My company is all service oriented - so I don't have much to actually write off since there are no cost of goods.
Cost of labor for your business will be what you actually paid to others as wages.
That is the problem. I am the only one who works for my company so how do I decide what to pay myself so that I can write it off? Are you I just decide whatever I want my hourly wage? Or is it better to just pick a salary?
If you are filing a Schedule C for self employment or as a Single Member LLC or Sole Proprietor, etc. you cannot take a withdrawal or salary and include it as an expense on your tax return. You are not an employee of the business. You don't pay yourself or enter a salary or withdrawal for yourself. All the business income and expenses are your personal income and expenses in the first place. You just fill out a Schedule C. The net profit or loss is your income. If you have a net profit of $400 or more on schedule C you will pay SE self employment tax on it in addition to your regular income tax. It's all included on your personal 1040 form.
You don't enter your pay or withdrawals on schedule C or into your tax return at all. And you don’t include it as income anywhere else. (And if you paid yourself and deducted it as an expense then you would have to include it as income on the same tax return so it would be a wash.)
See Schedule C instructions page C-10 Line 26
Do not include salaries and wages deducted elsewhere on your return or
amounts paid to yourself.
https://www.irs.gov/pub/irs-pdf/i1040sc.pdf