LLC private practice

[IDCM]

Hello, I am considering an LLC for the first time and would appreciate some basic information about income and taxes. Income goes to the individual yet taxes are filed under the LLC, correct? Are taxes for LLC typically estimated quarterly? Thank you for your time.

[RSUMan]

A single member LLC is a Disregarded Entity for IRS purposes.

The income and expenses of the LLC are reported on Schedule C of your Federal income tax return.

The profit you make in your LLC which shows up on the Schedule C and then flows into the Taxable Income calculation on your Form 1040.

The single member LLC does not file a separate income tax return.

You may have some state compliance filings to complete each year depending on which state the LLC was formed in.

Your profit on Schedule C will be subject to the 15.3% Self-Employment tax.

[marctu]

@IDCM.  So most Limited Liability Company’s are disregarded entities for federal tax purposes.   They would file their income and expenses on either Schedule C or E.  A multi-member LLC would need to file either a Form 1065 or an 1120-S.  The income and expenses would then flow through to the partner, 1065, or shareholder, 1120-S, through a K-1.

So quarterly taxes would  be associated with both a disregarded entity or a Form 1065 or and 1120-S.  

If you want to add to this @IDCM by adding whether this is a single or multi-member LLC you are contemplating, I will supplement this answer.

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[IDCM]

Single-member LLC.

[marctu · Accepted solution]

Thank you @IDCM.   I think both the answers on this are excellent.   Since it is single member LLC you are contemplating go with the disregarded entity and file it with your personal tax return.  Less tax compliance costs in the short-term.  You can always switch to filing as what would most likely be an S-Corp on an 1120-S in the future.  Best of luck!

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