The owner of a singleperson LLC can avoid paying selfemployment taxes by electing to have the LLC treated as a corporation.

Question

The owner of a single­person LLC can avoid paying self­employment taxes by electing to have the LLC treated as a corporation.

Quizplus · Accepted Answer

By electing to have the LLC treated as a corporation, the owner can pay themselves a salary and only be subject to employment taxes on that salary, rather than self-employment taxes on all profits of the LLC. However, this may not always be the most beneficial tax structure for the LLC and should be discussed with a tax professional.

The Owner of a Single­person LLC Can Avoid Paying Self­employment

The Owner of a Singleperson LLC Can Avoid Paying Selfemployment