🏢 LLC Tax Calculator
LLCs are pass-through: profits flow to your personal return and face both self-employment tax and income tax. See the full bill.
How LLC Taxation Works
A single-member LLC is a disregarded entity and a multi-member LLC is a partnership by default — either way, the IRS taxes profits on your personal return. That means two layers of tax on the same profit.
The Two Layers
1. Self-employment tax (15.3%) — 12.4% Social Security (on earnings up to the $176,100 wage base) + 2.9% Medicare, applied to 92.35% of net profit. 2. Income tax — federal progressive brackets (10%–37%) on profit minus half your SE tax minus the standard deduction ($15,000 single / $30,000 married), plus your state tax. Pass-through owners may also qualify for the 20% QBI deduction (Section 199A), which this estimate excludes — a CPA can tell you if you qualify.
Worked Example
Single filer, $120,000 LLC profit, 5% state tax. SE base = $120,000 × 92.35% = $110,820 → SE tax = $16,955. Federal taxable = $120,000 − $8,478 (half SE) − $15,000 = $96,522 → federal tax ≈ $16,149. State tax = $6,000. Total ≈ $39,104 — an effective rate of about 32.6%, leaving $80,896 after tax.
Official reference: IRS.gov. This is an estimate for planning only — not tax advice. Verify with a CPA or tax professional before filing.
LLC Tax Planning Levers
Three moves matter most. First, the 20% qualified business income (QBI) deduction can exempt a fifth of your profit from income tax (not SE tax) — but it phases out for high-earning service businesses (SSTBs) above ~$197,300 single / $394,600 married for 2026. Second, the S-corp election: once profit reliably exceeds ~$40,000–$60,000, paying yourself a reasonable salary and taking the rest as distributions can save thousands in SE tax — model it against ~$1,500–$3,000/year in payroll admin costs. Third, retirement contributions: a Solo 401(k) lets you shelter up to ~$70,000 (2026) as both employee and employer, far more than a SEP IRA once income rises. Set aside 25–30% of profit in a separate account and pay quarterly estimates (April, June, September, January) to avoid underpayment penalties.
Frequently Asked Questions (FAQs)
Do LLCs pay corporate tax?
No, by default. A single-member LLC is taxed as a sole proprietorship and a multi-member LLC as a partnership — profits pass through to owners' personal returns. An LLC can elect S-corp or C-corp taxation with Form 2553 or 8832.
What is the self-employment tax rate in 2026?
15.3% total: 12.4% Social Security on earnings up to the $176,100 wage base plus 2.9% Medicare on all earnings. It applies to 92.35% of net profit, and half is deductible against income tax.
Can an LLC reduce self-employment tax?
Electing S-corp taxation lets you take part of the profit as distributions not subject to SE tax — you only pay payroll tax on a reasonable W-2 salary. It typically pays off around $60k–$80k+ in profit.
Do I owe quarterly estimated taxes as an LLC owner?
Yes, if you expect to owe $1,000+ — the IRS wants pay-as-you-go via Form 1040-ES, due April, June, September, and January. Safe harbor: pay 100% of last year's tax (110% at higher incomes).
What is the QBI deduction?
Section 199A lets eligible pass-through owners deduct up to 20% of qualified business income. Service businesses phase out above certain income thresholds. It can significantly cut the income-tax layer.
Last updated: September 2026
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Last updated: September 2026