USA LLC Federal Taxation

[brandon]

If I have a Single Member LLC and pay myself through the business entity, what do I claim as income? Do I claim all income earned toward the business or do I claim the income distributed by the LLC?

 

[kirby]

Not enough info. Did you file an 8832 and if so what did you elect?

 

[brandon]

Sorry for the limited info,
My understanding is that it is a disregarded entity and should be filed as a sole proprietorship. Let me use an example, I received only $50,000 of elected distributions from the LLC, but the LLC earned $100,000 in revenue for the year. Should this be claimed at the $100,000 level or the $50,000 level?

 

[kirby]

If it's disregarded then it ain't there and all that is earned in the LLC flows into your own 1040.

That is done by picking up all that LLC income on (usually) Schedule C - Profit and Loss from Business and remember to assess self employment tax on those earnings.
Get some professional GUIDANCE though as I understand that a disregarded entity is still on the hook to file employment tax.

 

[brandon]

Thanks for your help kirby. I will check into professional guidance. By employment tax, you mean "self-employment" tax? I just want to be clear in my understanding.

 

[kirby]

No. The powers that be decided that even if an LLC is disregarded for income purposes it is still liable for employment tax. Bizarre, yes, but this is so.

 

[infotaxsquare]

Hi,

Basically, You are required to report your income on schedule "C" as a single member LLC not on 1065-K1.

Regards,

InfoTaxSquare.com