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New Member
posted May 31, 2019 2:36:42 PM

Do i have to pay self exployment tax on salary i recieve from my disregarded llc if i have a have a overall loss in income

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1 Best answer
Level 15
May 31, 2019 2:36:55 PM

you cannot be an employee of a dis-regarded entity -- you are  sole proprietor and report entity incomes and expenses on schedule-C

5 Replies
Level 15
May 31, 2019 2:36:55 PM

you cannot be an employee of a dis-regarded entity -- you are  sole proprietor and report entity incomes and expenses on schedule-C

Level 15
May 31, 2019 2:37:01 PM

The only way to avoid this is to elect to be treated as a corporation.  This election is made by filing Form 8832. Did you do so?

Level 13
May 31, 2019 2:37:10 PM

If your LLC is really a "disregarded" entity then you should not be taking a "salary" or "wages" from the LLC.  The LLC is disregarded and all its income or loss, with any "wage" or "salary" not counted as an expense, is reported by you on your own Schedule C.  If the "bottom line" of the Schedule C is positive (income) then that's your income and that's the starting point for calculating Self Employment tax.

Tom Young


Level 15
May 31, 2019 2:37:12 PM

What if he has two schedule C's. Is SET calculated on each one separately or on the net income from both?

Level 15
May 31, 2019 2:37:14 PM

Self employment tax is on all sch C (per taxpayer) so they would be combined and take into account any W2 SS box 4.