How is the LLC operating income taxed? The tax side is way different… BAD. A single member LLC is a “disregarded” entity. Thus, the LLC would not do a separate tax return as would a corporation. The owner (now you know to say member) would account for the income exactly as a sole proprietor on a Form 1040 Schedule C. But, the member gives up the opportunity to save on payroll taxes versus self-employment tax (the main reason for “S” corps). That’s BAD.
There is more information on LLC’s on our website www.USATaxHelp.com