Sorry, I meant to say TurboTax, not TaxAct!!! I own TurboTax Home & Business (desktop).
This article has helped me. It appears that a one-member LLC is treated as sole proprietorship for tax purposes. I just need to file schedule C for income.
So to confirm: it appears that the notion of salary vs. distributions, whereby I save on payroll taxes on the distributions, does NOT apply to me? From the article, this is a bit vague:
The current rule is that any owner who works in or helps manage the business must pay self-employment tax on his distributive share (rightful share of profits). If you actively manage or work in your LLC, you can expect to pay self-employment tax on all LLC profits allocated to you. Each member who is subject to the self-employment tax reports the amount due on Schedule SE.
My confusion: do I get to choose what my 'distributive share' is, and if yes, where do I indicate that in TurboTax Home & Business? Or is it because I'm a single member LLC using Schedule C, I do not get to choose, and must pay self-employment tax on 100% of net income?
