Are one-man LLCs subject to self employment taxes?
August 9, 2002
Subject: SE/FICA
Date: Mon, 08 Jul 2002
From: A. Friedman
In 1998, I attended a seminar during which we were told that a one man LLC was not subject to SE/FICA under any circumstances. However, I have not been able to determine this on my own. Might you help? If so, please show citations with your answer.
Thanks,
A. Friedman
Answer
Date: Wed, 31 Jul 2002
Hello A. Friedman,
The IRS has not issued any guidelines about how SE tax applies to an LLC. Preliminary regulations were withdrawn. A one-person LLC is a disregarded entity. Income from the LLC for a business will be reported on Schedule C. I think it is very risky to not report self-employment income when you are reporting on a Schedule C.
I recommend that you seek help from a CPA or tax attorney.
Good luck!
Mike Gray
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