# Single-member LLC taxes

Source: https://joinopenfile.com/guides/single-member-llc-taxes
Index: https://joinopenfile.com/llms.txt

A single-member LLC pays no federal income tax of its own. The IRS treats it as a disregarded entity by default, so its income and expenses go on the owner's personal return, usually on Schedule C, and the owner pays income tax plus 15.3% self-employment tax on the net earnings. The LLC is still a separate entity for employment and certain excise taxes, and it can elect to be taxed as a corporation instead.Updated November 6, 2026

## What disregarded entity means

The IRS says an LLC with only one member is treated as an entity disregarded as separate from its owner for income tax purposes, unless it files Form 8832 and elects to be treated as a corporation. Publication 3402 puts the consequence plainly: the LLC should not file an income tax return. Its income, deductions, gains, losses and credits are reported on the owner's return instead.

That means the profit is taxed to you whether you move the money to your personal account or leave it in the business account. Disregarded is a tax word, not a state one. The state still treats the company as separate, which is what [limited liability](https://joinopenfile.com/guides/what-is-an-llc) rests on.

## Which forms you file

The IRS says the activities of a single-member LLC owned by an individual generally go on Form 1040 or 1040-SR with one of these schedules:

Schedule C, Profit or Loss from Business, for a trade or business.

Schedule E, Supplemental Income or Loss, for rental property and similar income.

Schedule F, Profit or Loss From Farming.

If the single member is a corporation or a partnership rather than a person, the IRS says the LLC is reported on that owner's return as a division of it.

## Self-employment tax

The IRS says an individual owner of a single-member LLC that operates a trade or business is subject to tax on net earnings from self-employment in the same manner as a sole proprietorship. There is no employer withholding, so you pay both halves yourself.

The rate is 15.3%: 12.4% for Social Security and 2.9% for Medicare. For 2026 the Social Security part applies to the first $184,500 of combined wages, tips and net earnings. The Medicare part has no ceiling, and an extra 0.9% starts at $200,000 of income for a single filer, $250,000 filing jointly and $125,000 filing separately. You file Schedule SE if your net earnings from self-employment were $400 or more.

One break: you deduct the employer-equivalent portion of the tax when you figure your adjusted gross income. It lowers your income tax, not the self-employment tax itself.

## Paying during the year

Nobody withholds tax from your profit, so you pay as you go. The IRS says individuals, including sole proprietors, generally have to make estimated tax payments if they expect to owe $1,000 or more when the return is filed. The payments cover income tax and self-employment tax together.

For 2026 the four due dates are April 15, June 15 and September 15, 2026, and January 15, 2027. Form 1040-ES says you can skip that last one if you file the return by February 1, 2027 and pay the whole balance with it. Underpay a period and you can be charged a penalty even if the return ends in a refund.

## The 20% deduction

Owners of sole proprietorships and other pass-through businesses may be eligible for the qualified business income deduction under section 199A. The IRS says it lets eligible taxpayers deduct up to 20% of their qualified business income, and that it is available whether you itemize or take the standard deduction.

It isn't automatic. The amount can be limited by your taxable income, the kind of trade or business, the W-2 wages the business pays and the basis of the property it holds, and for tax years beginning after 2025 the IRS also lists a minimum deduction for active qualified business income. Have a tax preparer work out your number.

## When the LLC needs its own EIN

Being disregarded for income tax doesn't make the LLC invisible. Under final regulations issued in August 2007, a single-member LLC is treated as the taxpayer for certain excise taxes accruing on or after January 1, 2008 and for employment taxes accruing on or after January 1, 2009. For wages paid after January 1, 2009 the LLC has to use its own name and EIN to report and pay employment taxes.

For income tax reporting it's the other way round. The IRS says a disregarded LLC generally uses the owner's Social Security number or EIN, so a Form W-9 from the LLC gives the owner's number, not the LLC's.

An LLC with no employees and no excise tax liability doesn't have to have an EIN, though the IRS says most new single-member LLCs will need one, and you can get one anyway to open a bank account. [How to get an EIN](https://joinopenfile.com/guides/how-to-get-an-ein) covers the application, and [how to look up an EIN](https://joinopenfile.com/guides/how-to-look-up-an-ein) covers finding one you've lost.

## Choosing corporate treatment instead

You can leave the default behind. File Form 8832 to be classified as a C corporation. File Form 2553 to be taxed as an S corporation, and Publication 3402 says an LLC doesn't have to file Form 8832 first, because filing Form 2553 is deemed to elect corporation classification as well.

An S corporation puts an owner who works in the business on payroll at a reasonable salary, and only the profit above it comes out free of employment tax. [LLC or S corp](https://joinopenfile.com/guides/llc-vs-s-corp) weighs that against the payroll and the second return, and [how to file Form 2553](https://joinopenfile.com/guides/how-to-file-form-2553) goes through the form and its deadline.

## If a married couple owns it

Two owners usually means a partnership, and the IRS says an LLC owned by a husband and wife in a state that isn't a community property state should file as a partnership. It also says spouse-owned LLCs are not eligible to be qualified joint ventures, because they are state law entities.

Community property states are the exception. Revenue Procedure 2002-69 covers an entity wholly owned by a husband and wife as community property, where no one else counts as an owner and the entity isn't treated as a corporation. For such a qualified entity the IRS accepts either treatment, disregarded or partnership, as the couple reports it. Changing the position later is treated as a conversion of the entity, so pick one with an accountant.

## If the owner isn't a US person

A US LLC wholly owned by a foreign person has its own filing even with no income tax return to make. Under the section 6038A regulations, a foreign-owned US disregarded entity is treated as separate from its owner and classified as a corporation for those reporting rules. It files a pro forma Form 1120 with Form 5472 attached by that Form 1120's due date, filling in only its name and address and items B and E on the first page.

The penalty for not filing Form 5472 when due is $25,000, with another $25,000 if the failure continues more than 90 days after the IRS gives notice. [Our free Form 5472 check](https://joinopenfile.com/form-5472) tells you whether it applies to you.

## State tax is a separate question

The IRS disregarding your LLC says nothing about your state. Publication 3402 tells you to check your state's own requirements, and most states charge a fee or a report to keep the company active whatever the IRS does. Delaware is a clear example: its LLC Act classifies an LLC as a partnership for Delaware tax unless it is classified otherwise federally, and still charges every domestic LLC a $400 annual tax due on June 1.

[LLC cost by state](https://joinopenfile.com/llc/cost) lists each state's filing fee and recurring fee, and [annual reports by state](https://joinopenfile.com/annual-report) has what's due and when. Your state tax agency is the one to ask about income and franchise tax.

## Questions

Does a single-member LLC file its own tax return?

Not for federal income tax, on the default treatment. IRS Publication 3402 says the LLC should not file an income tax return, and its income and expenses go on the owner's return. An LLC that elects to be taxed as a corporation does file its own return.

Is a single-member LLC a disregarded entity?

By default, yes. The IRS treats an LLC with one member as an entity disregarded as separate from its owner for income tax purposes unless it files Form 8832 and elects to be treated as a corporation.

How much tax does a single-member LLC pay?

The LLC itself pays no federal income tax by default. You pay income tax on the profit at your own rate, plus 15.3% self-employment tax on net earnings: 12.4% for Social Security on the first $184,500 of combined wages, tips and net earnings in 2026, and 2.9% for Medicare with no ceiling.

Does a single-member LLC need an EIN?

Not always. The IRS says a disregarded single-member LLC with no employees and no excise tax liability can use the owner's number instead, though most new ones will need an EIN, and you can get one to open a bank account or because your state asks for it.

Can I pay myself a salary from a single-member LLC?

Not as wages while the LLC is disregarded. The IRS taxes an individual owner the same way as a sole proprietorship, so your pay is the profit, you take it out as a draw with no withholding, and self-employment tax applies to the net earnings. Electing S corporation status puts you on payroll instead.

What happens if the LLC lost money?

A loss is reported on the same schedule as a profit and can offset your other income, subject to the loss rules. There are no net earnings from self-employment to tax, so no self-employment tax on that business for the year.

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## Sources

- [IRS: Single member limited liability companies](https://www.irs.gov/businesses/small-businesses-self-employed/single-member-limited-liability-companies)
- [IRS: Publication 3402, Taxation of Limited Liability Companies](https://www.irs.gov/publications/p3402)
- [IRS: Self-employment tax (Social Security and Medicare taxes)](https://www.irs.gov/businesses/small-businesses-self-employed/self-employment-tax-social-security-and-medicare-taxes)
- [IRS: Form 1040-ES, Estimated Tax for Individuals (2026)](https://www.irs.gov/pub/irs-pdf/f1040es.pdf)
- [IRS: Qualified business income deduction](https://www.irs.gov/newsroom/qualified-business-income-deduction)
- [IRS: Instructions for Form 5472](https://www.irs.gov/instructions/i5472)
- [Delaware LLC Act, section 18-1107](https://delcode.delaware.gov/title6/c018/sc11/index.html)

## Keep reading

- [What is an LLC?](https://joinopenfile.com/guides/what-is-an-llc)
- [LLC or S corp?](https://joinopenfile.com/guides/llc-vs-s-corp)
- [How to get an EIN for your business](https://joinopenfile.com/guides/how-to-get-an-ein)
- [Types of LLCs](https://joinopenfile.com/guides/types-of-llcs)