Do I have to pay a salary and Federal and state taxes. I have a net profit of $8,000 and thought I had to pay a salary. Can you help me understand what is required?

[geverett8056]

I am confused whether I am required to pay a salary in a single member LLC. 

[SweetieJean]

Is it an S Corp?

[Howard1948 · Accepted solution]

A single-member LLC is handled for Federal income tax purposes the same as a sole proprietorship.  You include all the income and expenses of the LLC on Schedule C of your personal Federal income tax return.  You do NOT have to pay yourself a salary since all the income is already included in your return on that Schedule C.  You will be responsible for not only the Federal income tax on that income but also the Self-Employment tax of roughly 15.3% on that income if it is more than $400.  When you complete Schedule C in TurboTax, TT will automatically include the SE tax calculation.