If a multi-person LLC has $12,000 in the bank at the end of the tax year, do the owners pay taxes on the undistributed funds?

[AmyT · Accepted solution]

No, you do not pay taxes based on the amount in your bank account(s) at the end of the year.

Each member (owner) of the LLC will pay taxes on their portion of the profits (income minus expenses) of the business for the year.