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2 Replies Last post: Feb 16, 2009 5:52 PM by modernbusines

Does an LLC need to pay Self Employment taxes?

Oct 10, 2007 1:41 PM

Click to view Pablo14's profile Start-up Pablo14 4 posts since
Oct 10, 2007
Does an LLC need to pay Self Employment taxes?
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Click to view sumfun1's profile Start-up sumfun1 6 posts since
Oct 10, 2007
1. Re: Does an LLC need to pay Self Employment taxes? Oct 10, 2007 1:51 PM
in response to: Pablo14
Yes they do. Because you are a limited liability corporation.
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Click to view Lighthouse24's profile Mogul Lighthouse24 2,396 posts since
Oct 10, 2007
2. Re: Does an LLC need to pay Self Employment taxes? Oct 21, 2007 1:42 AM
in response to: Pablo14

Yes, if any one of the following applies:
  • You work more than 501 hours during the LLC's tax year;
  • Your LLC offers professional services (consulting, health, law, engineering, architecture, accounting, etc.);
  • You are allowed to execute contracts for your LLC.
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Click to view Sunkist's profile Professional Sunkist 14 posts since
Oct 29, 2007
3. Re: Does an LLC need to pay Self Employment taxes? Oct 29, 2007 10:12 AM
in response to: Pablo14
What did you elect on your SS-4 when you were applying for the EIN?

Partnership
Disregard entity
Corporation

?
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Click to view Pablo14's profile Start-up Pablo14 4 posts since
Oct 10, 2007
4. Re: Does an LLC need to pay Self Employment taxes? Oct 29, 2007 10:23 AM
in response to: Sunkist
Partnership
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Click to view LUCKIEST's profile SCORE LUCKIEST 7,938 posts since
Aug 6, 2007
5. Re: Does an LLC need to pay Self Employment taxes? Oct 29, 2007 10:51 AM
in response to: Pablo14
The LLC in a true sense, does not pay Self Employment taxes.
Any profit the LLC makes is split or passed along to the partners. The partners then pay taxes and self employment
taxes on their share. Do you have an accountant??
LUCKIEST
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Click to view Sunkist's profile Professional Sunkist 14 posts since
Oct 29, 2007
6. Re: Does an LLC need to pay Self Employment taxes? Oct 29, 2007 10:51 AM
in response to: Pablo14
General Partners are subject to self employment taxes and Limited Partners are not subject to self employment taxes depending on certain criterias. It get's complex as well. I recommend you to talk and retain an Accountant knowledgeable in Partnership Taxation and Book Keeping.
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Click to view Pablo14's profile Start-up Pablo14 4 posts since
Oct 10, 2007
7. Re: Does an LLC need to pay Self Employment taxes? Oct 29, 2007 10:56 AM
in response to: Sunkist
Thank you. I am in the process of speaking to an accountant. Thanks again.
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Click to view Pablo14's profile Start-up Pablo14 4 posts since
Oct 10, 2007
8. Re: Does an LLC need to pay Self Employment taxes? Oct 29, 2007 2:24 PM
in response to: LUCKIEST
Thank you. This is what I thought. I am in the process of speaking with an accountant. Thanks.
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Click to view martin1sanche's profile Start-up martin1sanche 2 posts since
Oct 28, 2007
9. Re: Does an LLC need to pay Self Employment taxes? Oct 29, 2007 2:10 PM
in response to: sumfun1
1040
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Click to view martin1sanche's profile Start-up martin1sanche 2 posts since
Oct 28, 2007
10. Re: Does an LLC need to pay Self Employment taxes? Oct 29, 2007 2:13 PM
in response to: martin1sanche
1040
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Click to view Excellent's profile Mogul Excellent 46 posts since
Oct 12, 2007
11. Re: Does an LLC need to pay Self Employment taxes? Oct 30, 2007 10:39 AM
in response to: Sunkist
I'm an LLC with no partners and was instructed, by an attorney, to check off "disregard entity". What does that mean in regards to self employment taxes?
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Click to view Sunkist's profile Professional Sunkist 14 posts since
Oct 29, 2007
12. Re: Does an LLC need to pay Self Employment taxes? Oct 30, 2007 11:15 AM
in response to: Excellent
You are regarded as a Sole Proprietor for tax purposes and your business income is subject to self empoyment taxes.
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Click to view BDS INC's profile Founders BDS INC 131 posts since
Jul 20, 2007
13. Re: Does an LLC need to pay Self Employment taxes? Oct 30, 2007 12:40 PM
in response to: Pablo14
The short answer is yes but definitely contact your accountant.
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Click to view 42n8lady's profile Professional 42n8lady 14 posts since
Dec 11, 2007
14. Re: Does an LLC need to pay Self Employment taxes? Dec 29, 2007 3:56 AM
in response to: Pablo14
What Luckiest wrote is true. As a limited partner, whatever split of the income you receive will have to be entered in your personal tax return. A LLC is a pass through entity.
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