As a sole proprietor LLC,

Forum|Forum|6 years ago
April 29, 2020
1 reply
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I need to show my wages as the owner, but they are a draw from the company as a sole proprietor how do I figure an average and do I add that to Line 26 with all of my other wages? Also do I give myself a 1099?

Well I get notified when answers come in?
I am a newbie

Not A Product Question

VolvoGirl

Level 15

What kind of LLC? Are you a Single Member LLC? Did you elect to be an S corp? If you are you need to file a separate Business return, not a schedule C.

You don't enter your pay on schedule C or into your tax return at all.

You cannot deduct your own salary or any personal withdrawals you make from your business. As a sole proprietor, you are not an employee of the business.

Sole proprietors cannot take a withdrawal or salary and include it as an expense on their tax return. As a sole proprietor, you are not an employee of the business. You don't pay yourself or enter a salary or withdrawal for yourself. All the business income and expenses are your personal income and expenses in the first place. You just fill out a Schedule C. The net profit or loss is your income. If you have a net profit of $400 or more on schedule C you will pay SE self employment tax on it in addition to your regular income tax. It's all included on your personal 1040 form.

(And if you paid yourself and deducted it as an expense then you would have to include it as income on the same tax return so it would be a wash.)

See Schedule C instructions page C-10 right above line 30, Do not include….amounts paid to yourself

http://www.irs.gov/pub/irs-pdf/i1040sc.pdf

DtaxmanAuthor

Level 2

I did not elect to be a s corp. I started the co as an LLC with a sole owner, and filing as a sole proprietor. does that make sense, because I am still trying to figure our the difference

my only goal here is to apply for the PPP loan program and need to show my employees. they have been with me for 19 years. I should have changed their status and payment method years ago. but I did't - so here we are.

for now I just need to know this I guess.

"can a 1099 employee be used in figuring payroll wages for the PPP loan application?"

you answer was great !! thank you so much. the Schedule C almost killed me. my degrees are in AIA and Structural Design, I now feel humbled. I have never filed that before, I lost my Cpa last year and have learned respect for her profession - as well as a collection of new words.

as an LLC (ll company) as single owner, I am filing as a sole proprietor - so I am using the Schedule C - right? I was told that could be wrong. hmmm. there's another new word 😞