LLC question

Forum|Forum|1 year ago
October 4, 2024
10 replies
47 views

Let's say I started a single owner LLC and I make $100,000 in one year. Can I just keep the profit in the LLC not taking self employment pay and distribution?

Anonymous_

Level 15

No. You have to report income and expenses each tax year on Schedule C, the same as a sole proprietor.

You cannot defer federal income tax by not taking "distributions" (which would merely be withdrawals from a sole proprietorship).

SLYKTAXAuthor

Level 6

Another questions on single owner LLC:

Is it mandatory to take a self employment pay? If so, I have retired with a government pension and with Medicare but not SSI pension. Do I have to pay for SSI & Medicare tax as well?

Assuming I have losses in LLC when first started.

I have loses in carryover from past years stock trading that I can deduct $3,000 from my AGI, can I also deduct losses (how much is the limit?) if I have LLC losses?

Anonymous_

Level 15

@SLYKTAX wrote:
Is it mandatory to take a self employment pay?....Do I have to pay for SSI & Medicare tax as well?

As single-member LLCs are disregarded for federal income tax purposes, you do not take a salary.

Rather, you report your income and expenses on Schedule C (1040) and the net profit is reported on Schedule SE where self-employment tax (SS/Med) will be calculated.