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 Preliminary regulations were withdrawn.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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