How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Lev Your Own Question
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 29657
Experience:  Taxes, Immigration, Labor Relations
Type Your Tax Question Here...
Lev is online now
A new question is answered every 9 seconds

I have formed an LLC a few years back. I have been employed

Resolved Question:

I have formed an LLC a few years back. I have been employed full-time and did not have significant activities with my LLC. I have received some business, and got payments to my company, recently. I have claimed the income on my tax return last year. Now I am planning to turn into part-time at my current work and work for my own company full-time. Can I handle taxes myself? Do I need to start paying self-employment tax, SS etc? Since I am an engineering consultant, my business is quite simple. Please advise.
Submitted: 5 years ago.
Category: Tax
Expert:  Lev replied 5 years ago.
Hi and welcome to Just Answer!

The advantage of LLC - you do not need to file any formal forms, however any registration where you reported the ownership - need to be updated if there is a change in ownership.

As a single member LLC - you generally report all income and expenses as solo proprietorship.

The business income and expenses will be reported on the schedule C -

There will not be any self-employment taxes because you are reporting losses.

The net loss will be reported on the form 1040 line 12 -

I suggest you following references for starting the business

Generally LLC is not taxable entity - all income should be passed through to members and should be reported on individual tax returns regardless it was distributed or not.

If the business has net income over $400, it may be required to file Schedule SE, Self-Employment Tax and net income is likely self-employment income and 15.3% self-employment tax would be required (13.3% in 2011).
Let me know if you need any help or clarification.

Lev and 2 other Tax Specialists are ready to help you