How the IRS Taxes a Single-Member LLC by Default
A disregarded entity is a business the IRS doesn’t treat as separate from its owner for income tax. Under the IRS single-member LLC rules, this is the default unless you elect corporate treatment. In practice, the LLC’s income flows onto your own return.
Schedule C
You report your business income and expenses on Schedule C, which you attach to Form 1040 or 1040-SR. Depending on the type of activity, some owners use Schedule E or Schedule F instead.
Self-Employment Tax
Self-employment tax is the Social Security and Medicare tax you pay when you work for yourself. The self-employment tax rate is 15.3%, made up of 12.4% for Social Security and 2.9% for Medicare. You file Schedule SE if your net self-employment earnings are $400 or more.
The 12.4% Social Security portion applies only up to a yearly earnings cap. That cap is $176,100 for 2025, per the 2025 Schedule SE, and $184,500 for 2026. An additional 0.9% Medicare tax applies to earnings above $200,000 for single filers, $250,000 for joint filers and $125,000 for married people filing separately.
You can deduct the employer-equivalent portion of your self-employment tax when figuring your AGI. AGI, or adjusted gross income, is your total income minus certain adjustments, and it helps determine your tax.
Estimated Taxes
Because the LLC’s profit lands on your personal return, you may need to pay tax on it during the year. You generally make estimated tax payments with Form 1040-ES if you expect to owe $1,000 or more. The 2026 Form 1040-ES lists these due dates.
| Payment | Due date |
|---|---|
| 1st | April 15, 2026 |
| 2nd | June 15, 2026 |
| 3rd | September 15, 2026 |
| 4th | January 15, 2027 |
Once you know your amounts, you can pay estimated taxes online.
Qualified Business Income Deduction
Your LLC profit may also qualify for the QBI deduction. It lets you deduct up to 20% of your qualified business income using Form 8995. Recent legislation made this deduction permanent.
When Your LLC Needs an EIN
An EIN, or Employer Identification Number, is a tax ID number for a business. Your single-member LLC needs one if it has employees or must file certain excise tax forms. Otherwise, you don’t need one, though you may get one for a bank account or to meet state law.
For employment taxes and certain excise taxes, the IRS treats your LLC as a separate entity. That’s an exception to the disregarded entity rule.
Choosing Corporation or S Corp Tax Treatment
If the default doesn’t fit your business, you can elect a different tax classification.
Corporation Election
You can elect to have your LLC taxed as a corporation by filing Form 8832. The LLC is then taxed separately from you.
S Corp Election
An LLC that’s taxed as a corporation may be able to elect S corporation status by filing Form 2553. Check the eligibility rules before you file.
| Tax treatment | Form to file | How it works |
|---|---|---|
| Disregarded entity (default) | None | You report profit on Schedule C and pay self-employment tax |
| Corporation | Form 8832 | The LLC is taxed separately from you |
| S corporation | Form 2553 | Available to an LLC taxed as a corporation that qualifies |
