Members of an LLC taxed as a sole proprietor or partnership pay self-employment tax — 15.3% covering Social Security and Medicare — on 92.35% of net profit. Half of it is deductible against income tax.
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Frequently asked questions
What is the self-employment tax rate?
15.3% total (12.4% Social Security up to the annual cap, plus 2.9% Medicare) on 92.35% of net earnings.
Is this tax advice?
No — it's an estimate for planning. Consult a CPA for your exact liability and any S-corp election savings.