What are taxes like on a LLC?

[Applied]

Before I jump into this whole thing I was wondering what LLC's normally get taxed. I'm just looking for a brief description and figures.

 

For state sales tax (CT), is all I'd have to pay the sales tax I will charge customers? ie. If I sold $1,000 worth of merchandise to CT residents, would I just hand over the $60 (6% CT tax), to the state of CT or would I owe them something more?

 

As for Federal tax, I'm aware that a LLC is taxed as a sole-proprietorship and I would simply list any profits on my personal income tax. I'm also aware that as a business owner you have to pay both sides of Medicare and SS tax, the employer and employee portions. Now here's my confusion, when someone has a "real" job, tax is taken out throughout the year on their paycheck, so when you list your profit as income, does the IRS know how to tax this or do I have to specify something.

 

I'm reading of figures about 15.4% plus state sales tax, does this sound right? I should expect to pay only 15.4% on my business income, or is this just for medicare and SS tax. My confusion is that with my job, my federal tax is much higher.

 

What should I expect to pay percentage wise on my income for my LLC? (assuming profits are low.. less than 50k)

[Applied]

anyone know what I can expect to pay for either an LLC, sole-proprioship, just so I can get an idea. I would liek to see what I would have to set prices at. Any information would be really helpful.

 

Thanks

[tommy11011]

anyone know what I can expect to pay for either an LLC, sole-proprioship, just so I can get an idea. I would liek to see what I would have to set prices at. Any information would be really helpful.

 

Thanks

<{POST_SNAPBACK}>

 

Taxes on an LLC should be the same as a sole prop. The llc advantage is the pass through taxation, ie the benefits of a corporations reduced liability with the benefits of a sole props taxation.

[GraphicsGuy]

anyone know what I can expect to pay for either an LLC, sole-proprioship

 

On a sole proprietorship, the profits of your business, less expenses, depreciation, etc., add to the Adjusted Gross Income on your personal taxes. Also, as a business owner, you will likely find deductions that can lower your total tax bill.

 

The exact rate depends on the tax bracket you are in and whether the profit from your business raises your overall bracket. Depending on where your business is located, there may also be State, County and City taxes, licenses and fees.

 

Also, the employer half of your Social Security and Medicare taxes for yourself are also added to your total federal income tax. If you have employees, the employer half of their Social Security & Medicare taxes are paid separately, but still your responsibility. Also other State, County & City taxes/fees may apply if you have employees.

 

As has already been mentioned, LLC's are taxed in the same way. Just different IRS forms are used to calculate the amount that gets added to your 1040. Also, most States have annual fees for LLC's.

 

Unless you are quite experienced in taxes, it is advisable to consult a tax specialist or accountant while setting up your business. They can give you advice that will save you a lot of money and stress later.