I’m a sole proprietor and my self employment taxes is sky high should I become an LLC

Get Legal Help Today

 Secured with SHA-256 Encryption

I’m a sole proprietor and my self employment taxes is sky high should I become an LLC

I am wandering if becoming an
LLC will help ease some of the
self employment tax burden

Asked on January 18, 2018 under Business Law, Florida

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

No, it won't help. At the end of the day, the full amount of tax has to be paid. When someone works for *another* person, they have the advantage of the employer paying half this tax--the employer portion--while the employee pays only the employee portion. Self-employed, you pay the full tax. If you form and work for your own LLC, however, it's all your money: even if the LLC "technically" pays the employer portion, at the end of the day, it's paying with your money, since you and your work at the source of the funds in the LLC. Having your own LLC doesn't let you get part of the tax covered by someone else--you end up covering it all, whether it's coming out of your bank account labeled LLC or the account with your own name on it.


IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

Get Legal Help Today

Find the right lawyer for your legal issue.

 Secured with SHA-256 Encryption