As a sole proprietor LLC,

Forum|Forum|6 years ago
April 29, 2020
1 reply
0 views

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 found my answer, not what I was hoping for ( for my employees) tough, they are on their own ! jk

now I need to look into filing a PPP just myself (as an LLC (company) sold owner but filing as a sole proprietor - I guess I need to figure out how to 1099 myself. ? oh Lord.

why can't you simply walk into a bar...... and get laid?

why is everything seemingly so difficult. hmmm. back to instructions manual. there goes 6 hours of my life I will never get back . there's another word.

HERE IS WHAT I JUST FOUND.

" Last week, the SBA issued guidance concerning the rights of independent contractors with respect to Paycheck Protection Program (PPP) forgivable loans. First, the SBA clarified that employers cannot include compensation paid to independent contractors in calculating their own loan amount. Second, the SBA announced that independent contractors and self-employed individuals will be eligible to apply for a PPP loans starting April 10, 2020.

The SBA has not yet provided any guidance with respect to how to calculate the amount of an independent contractor's PPP loan. SBA guidance also appears to indicate that self-employed individuals, such as service partners, may be eligible for PPP loans even if their partnerships are not. This alert explores both these issues in preparation for the April 10, 2020 application date for independent contractors and self-employed individuals. "

VolvoGirl

Level 15

SEE ? I rest my case.

as it relates to my already confused inquires, does' t this seem to contradict what I thought I just learned. ?

this is from the PPP instructions for borrowers.

I have italicized and underlined my points.

What counts as payroll costs? Payroll costs include:

 Salary, wages, commissions, or tips (capped at $100,000 on an annualized basis for each employee);
 Employee benefits including costs for vacation, parental, family, medical, or sick leave; allowance for separation or dismissal; payments required for the provisions of group health care benefits including insurance premiums; and payment of any retirement benefit;
 State and local taxes assessed on compensation; and
 For a sole proprietor or independent contractor: wages, commissions, income, or net earnings from self-employment, capped at $100,000 on an annualized basis for each employee.

so that last one would be for me, right? NOT my employees. unlesss they wanted to file for PPP themselves. is the right?

Right the last one. And you just show it by the Net Profit on your Schedule C. You do not have to give yourself a 1099 or pay yourself wages. As I said above your personal income is the Net Profit or Loss on the Schedule C. It says the NET EARNINGS FROM SELF EMPLOYMENT.