Single Member LLCs

Single Member LLCs

When you register an LLC with the Dept of State and apply for your Federal Employer ID Number, the government will ask you how many members are a part of the LLC.  If you are setting up the LLC as the only member, you are considered a Single-member LLC.

Single-member LLCs default to being taxed as a sole proprietorship on your personal 1040 tax return.  The LLCs income and expenses are reported on the Schedule C and taxed at the same rate as your other ordinary income.  Single-member LLCs are also subject the self employment taxes in the same manner as a sole proprietorship.

Once your business starts to produce a significant profit, it may be time to discuss whether you should convert your single-member LLC to an S-corporation for tax purposes.  Manada Tax Service will help you to compare the taxes under the two tax structures and file the necessary paperwork to complete the conversion with the IRS. Since S-corporations have additional reporting requirements that result in extra fees, it is usually wise to wait to do the conversion until your tax savings outweigh the additional costs.

bridge

1040 Tax Preparation

We offer professional and affordable 1040 Tax Preparation Service.
Lancaster City Courtyard

Single Member LLCs

Single-member LLCs results are reported on your personal 1040 tax return.
Covered Bridge

Payroll & Bookkeeping

Payroll & Bookkeeping are vital aspects of every small business. We show you how to keep it simple while staying within your budget.
Inside Covered Bridge

Sole Proprietorships

We help sole proprietorships file accurate tax information.