Single-Member LLC Taxes: What You Actually Owe

You formed a single-member LLC, and now you are wondering how it changes your taxes. The honest and slightly anticlimactic answer for most people: not much. By default, the IRS basically ignores your LLC for income tax purposes and treats you like a sole proprietor. That sounds strange, but it is good news, because it keeps things simple. Here is what a single-member LLC really means at tax time.

The disregarded entity

By default, a single-member LLC is what the IRS calls a disregarded entity. That means for income taxes, the LLC does not file its own return. Instead, your business income and expenses go on a Schedule C attached to your personal Form 1040, exactly as they would if you had no LLC at all. One person, one tax return. The liability protection your LLC gives you is a legal matter, separate from how you are taxed.

You still owe self-employment tax

A common hope is that an LLC dodges self-employment tax. It does not. As a single-member LLC owner, you pay self-employment tax, the 15.3 percent that covers Social Security and Medicare, on your net profit, just like a sole proprietor. Our guide to self-employment tax breaks down how that number is built and why it surprises first-year owners.

The S-corp election option

You are not locked into the default. A single-member LLC can elect to be taxed as an S corporation, which can reduce self-employment tax by splitting your income into a reasonable salary and distributions. It also adds payroll, paperwork, and cost, so it only makes sense past a certain profit level. Our guide comparing sole proprietor, LLC, and S corp walks through where that line tends to fall.

The QBI deduction is yours too

One more piece of good news: as a single-member LLC owner you can generally claim the qualified business income deduction, worth up to 20 percent of your business income, subject to income limits. The 2025 tax law made this deduction permanent going forward, so it is not a perk that is about to expire. Our guide to the QBI deduction covers who qualifies.

How Vuuv helps

Because a single-member LLC reports on your personal return, clean Schedule C numbers are what you need, and that is what Vuuv is built to produce. Your income and expenses stay categorized through the year, and Vuuv generates a Schedule C report from them, so whether you file yourself or hand it to a CPA, the business side of your return is organized and ready instead of pieced together at the deadline.

This article is general information, not tax advice. Tax rules change and every situation is different. Confirm the details against current IRS guidance or talk to a qualified tax professional before you file.