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Richard
Richard, Tax Attorney
Category: Tax
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Experience:  29 years of experience as a tax, real estate, and business attorney.
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As a single Member LLC, can single member received wage as

Customer Question

As a single Member LLC, can single member received wage as employee (w2 form) ?
Submitted: 11 months ago.
Category: Tax
Expert:  Richard replied 11 months ago.
Welcome! My goal is to do my very best to understand your situation and to provide a full and complete answer for you.

Hi there and thanks so much for requesting me. Unfortunately, in general, no. Unless the LLC is treated as an S Corp, you do this through an employee leasing company, or you set up a tiered structure, a member in an LLC that provides services to the LLC can not be treated as an employee for federal income tax purposes; as a result, rather than receiving a W-2, such compensation paid to the member will be reflected on a K-1 as a “guaranteed payment.” The member would have to pay both employee and employer portions of FICA taxes (including OADSI and Medicare payroll taxes).



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Customer: replied 11 months ago.

so single member provide service to the LLC, cannot received wage, ex. W2 etc. I mean he only can file tax on form 1040 as annual income?

Expert:  Richard replied 11 months ago.
It would be reported on a K-1 as a guaranteed payment. No as W-2 wage income.
Customer: replied 11 months ago.

sorry, I don't get it. What is K-1?

Expert:  Richard replied 11 months ago.
Thanks for following up. Actually, I misspoke because I had not tied this question to your prior question as you treating your LLC as a disregarded entity. Since you do and report this on Schedule C rather than on a partnership return, your LLC operations will simply be on Schedule C. And, you will not treat this as W-2 wage income.
Customer: replied 11 months ago.

AS a single member LLC, can I pay myself some wage as w2, and rest of income of LLC will report on Schedule c.

Expert:  Richard replied 11 months ago.
No...that's not the way it works. Since you are treating this as a disregarded entity for tax purposes, you can not simply pay yourself from an entity that is being disregarded. I'm sorry!!!
Richard, Tax Attorney
Category: Tax
Satisfied Customers: 45611
Experience: 29 years of experience as a tax, real estate, and business attorney.
Richard and 2 other Tax Specialists are ready to help you
Expert:  Richard replied 11 months ago.
Thanks again for the positive rating! I truly appreciate that!

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