Is a single member LLC a sole proprietorship or an individual (Paypal Business)

Forum|Forum|2 years ago
October 5, 2023
4 replies
38 views

I'm not sure which option to select.

As I've read it can be either.

And they used to put Individual/SoleProprietor as the option. Now it's separate.

So not sure which one to select (no I haven't made any election to S-Corp etc) Just a standard basic Single Member LLC Thanks!

xmasbaby0

Level 15

A single member LLC or sole proprietorship is a disregarded entity. You just enter your self-employment income and make sure to prepare a schedule C for your business expenses. You will pay self-employment tax for Social Security and Medicare, as well as ordinary income tax. You need online Self-Employed or any version of the CD/download in order to prepare a Schedule C.

https://ttlc.intuit.com/questions/2926899-how-does-my-side-job-affect-my-taxes

https://ttlc.intuit.com/turbotax-support/en-us/help-article/form-1099-nec/1099-nec/L5qTsBiSe_US_en_US

https://ttlc.intuit.com/community/self-employed/help/how-do-i-report-income-from-self-employment/00/26653

https://ttlc.intuit.com/community/self-employed/help/what-is-the-self-employment-tax/00/25922

https://ttlc.intuit.com/questions/2902389-why-am-i-paying-self-employment-tax

https://ttlc.intuit.com/questions/1901340-where-do-i-enter-schedule-c

https://ttlc.intuit.com/questions/3398950-what-self-employed-expenses-can-i-deduct

https://ttlc.intuit.com/questions/1901110-do-i-need-to-make-estimated-tax-payments-to-the-irs

https://turbotax.intuit.com/tax-tools/calculators/self-employed/

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**

VolvoGirl

Level 15

Where is it asking you to pick one? On Turbo Tax? They should be the same. It shouldn't make a difference which one you pick. Maybe Turbo Tax will ask different questions based on which you pick. But that shouldn't affect your tax return.

Mike9241

Level 15

A single-member LLC is disregarded for tax purposes. so it would seem it doesn't matter whether you select individual or sole proprietor

Mike9241

davsea17Author

Level 5

I'm leaning towards selecting individual. What is categorized under individual?

I'm confused as to what the difference is? Thanks!

LiverSac

Level 2

A sole proprietorship is a business owned by a single individual person. The business name (if any) is a substitute for the person's name (and is sometimes called a "fictitious name". All liabilities, including judgements, of the sole proprietorship business are also liabilities of the person. Corporations (including LLCs) are used, in part, to shield owners, including a sole owner, from being personally liable for for many types of liabilities of the business.