I am planning to start a Financial Consulting firm in Dallas in the state of texas. I was thinking about starting my firm as LLC. I was researching about it and on the internet, at some places it said that LLC has to pay self-employment tax and at some other places it said that it does not pay self-employment tax? Can you help me with that? If possible can u give me a credible source from where i can confirm that.
Do LLC in Texas have to pay Self-Employment Tax?Can you give me a credible source from where i can confirm?
If an LLC elects to be taxed as a corporation, it would pay corporation income tax. Salary paid to the member would be a deduction. If it is a single member LLC that does not elect to be taxed as a corporation, the income would be reported on the single members income tax return as self-employment income subject to self-employment tax.
Reply:You (the owner) will have to pay Self Employment taxes (and social security) on your profits. Not on your gross.
Self Employment tax is just a nice way of saying income tax, or taxes paid on income not earned through a company that withholds taxes and issues W-2s.
Plus, depending on your state business tax situation, there may be many other taxes/fees you have to pay as a small business owner.
Consult with a local CPA. Now is their slow season and you may find one nice enough to fill you in for little or no money.
Good luck with your business.
pulling teeth
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