View Single Post
  #2 (permalink)  
Old 04-04-2007, 06:04 AM
Dgrowth  Dgrowth is offline Status: Offline
Senior Vice President
 
Join Date: Mar 2007
Posts: 111
Re: LLC Loan, Wages/Living, No Income

I found this online I hope it helps:

How LLCs Are Taxed
Like the owners of sole proprietorships and partnerships, LLC owners report business income and losses on their personal tax returns.

An LLC is not a separate tax entity like a corporation; instead, it is what the IRS calls a "pass-through entity," like a partnership or sole proprietorship. All of the profits and losses of the LLC "pass through" the business to the LLC owners (called members), who report this information on their personal tax returns. The LLC itself does not pay federal income taxes, but some states impose an annual tax on LLCs.

Income Taxes
The IRS treats your LLC like a sole proprietorship or a partnership, depending on the number of members in your LLC. If you've already done business as a sole proprietorship or partnership, you're ahead of the game because you know many of the rules already. If not, here are the basics:

Single-Owner LLCs
The IRS treats one-member LLCs as sole proprietorships for tax purposes. This means that the LLC itself does not pay taxes and does not have to file a return with the IRS.

As the sole owner of your LLC, you must report all profits (or losses) of the LLC on Schedule C and submit it with your 1040 tax return. Even if you leave profits in the company's bank account at the end of the year -- for instance, to cover future expenses or expand the business -- you must pay income tax on that money.
Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!
Reply With Quote