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Self-Employment Tax Guide
By BookMyLLC ExpertMarch 28, 20266 min read
Self-Employment Tax Guide for LLC Owners
As an LLC owner, you're both employer and employee for tax purposes. Understanding self-employment tax helps you plan and save.
What Is Self-Employment Tax?
Self-employment tax covers Social Security (12.4%) and Medicare (2.9%) contributions, totaling 15.3% of your net earnings. Unlike employees, LLC owners pay both the employer and employee portions.
How to Reduce Self-Employment Tax
Elect S-Corp taxation to split income between salary (subject to SE tax) and distributions (not subject to SE tax). Deduct the employer-equivalent portion of SE tax on your personal return.
