Managing taxes as an LLC business owner can feel overwhelming. That’s where an LLC tax calculator can make a big difference. It can simplify the tax process by helping you quickly estimate what you owe based on your business income and expenses. Whether you’re just starting out or have been in business for years, using a business tax calculator can save you time and reduce the stress that often comes with tax season. Key takeaways:

LLCs can be taxed as sole proprietors, partnerships, S Corps or C Corps.
LLC tax calculators can find federal, state and self-employed tax liabilities with a few details about income, expenses and your state of residence.
Ordinary and necessary business deductions can lower LLC income.

Table of contents

What is an LLC? How can it be taxed?...Read more

What taxes do LLCs have to pay?...Read more

LLC tax deductions...Read more

LLC tax calculator in action...Read more

If I made $7,000 a year, how much business tax do I owe?...Read more

What is an LLC? How can it be taxed?

As the name suggests, an LLC limits personal liability, meaning your personal assets are usually protected if your business faces legal trouble. It’s like a safety net that separates your personal finances from your business dealings. When it comes to taxes, an LLC is versatile. By default, the IRS treats single-member LLCs as “disregarded entities,” meaning they’re taxed like sole proprietorships. For multi-member LLCs, the IRS typically taxes them as partnerships. In both cases, the business income is passed through to the owners, who report it on their personal tax returns, avoiding the double taxation that corporations face. An LLC can also choose to be taxed as a corporation, either an S Corporation or a C Corporation. You can use a business tax calculator or an LLC tax rate calculator to check how each type of business structure will affect your bottom line before choosing the structure that's right for you.

Infographic entitled How Can An LLC Be Taxed showing different business structures that an LLC taxes calculator can find tax liability for.

What taxes do LLCs have to pay?

LLCs need to stay on top of several types of taxes: federal income taxes, self-employment taxes and state and local taxes. An LLC tax estimator can help you calculate what you owe. Depending on the type of business structure you choose to be taxed as, you may need to fill out different types of LLC tax forms.

Federal taxes

When paying federal taxes as an LLC, it’s important to understand how your business income is handled. For single-member LLCs, the business owner files federal income taxes as personal income on their individual tax return. If your LLC has two or more owners, each owner reports a portion of the business's income based on their ownership percentage. For example, if two founders each own 50% of the LLC, they would each report 50% of the income on their tax returns. An LLC tax rate calculator can help you figure out these amounts accurately. In addition to income taxes, LLCs with employees need to pay the federal unemployment tax, or FUTA. This tax is 6% of the first $7,000 each employee earns in a calendar year. So, for any employee making $7,000 or more, the FUTA contribution would be $420. Using an LLC tax estimator can help you keep track of these obligations and manage your responsibilities more effectively.

Self-employment taxes

If you’re running an LLC and working in it, you’ll need to pay self-employment taxes for Social Security and Medicare, which is 15.3% of your net earnings. This can add up, but it’s important for these programs. For LLCs taxed as sole proprietorships or partnerships, you pay self-employment tax on your share of the income. To help with these calculations, you can use an LLC tax estimator. This tool can show you how much you owe and help you plan. If your LLC is taxed as an S Corporation, you might save on self-employment taxes by paying yourself a salary and taking the rest as distributions, which aren’t taxed for self-employment. An LLC tax estimator can help you figure this out and stay compliant with IRS rules.

State and local taxes

Paying state and local taxes as an LLC can vary based on where your business is located. Most states have their own income taxes, so you’ll need to file a state tax return in addition to your federal taxes. For example, if you're operating in Florida, you can use a Florida tax calculator to estimate your state tax obligations. Similarly, if your LLC is based in Texas, a tax calculator for Texas can help you determine what you owe at the state level. In addition to state taxes, some states impose a franchise tax or annual fees just for operating there. Local taxes might include city or county business taxes, property taxes and local business license fees. Using a small business tax calculator can help simplify and manage your payments.

LLC tax deductions

LLC tax deductions can help you lower your tax bill by reducing your taxable income. As an LLC owner, you can deduct any ordinary and necessary business expenses to save money. Using an LLC taxes calculator can help you figure out and keep track of these deductions. Common deductions include office equipment and furniture, such as computers and desks. You can also deduct expenses for business-related phone calls and subscriptions to industry journals. If you have a business website, you can deduct the cost of hosting and design services. If you work from home, you might qualify for a home office deduction, covering part of your rent or mortgage, utilities, and internet service, as long as the space is used exclusively for business. Business insurance premiums, such as liability insurance, can also be deducted. If you pay for advertising or marketing to promote your business, those costs are deductible, too. A small business tax calculator can also make it easier to see how these deductions impact your overall tax liability.

Infographic entitled Common LLC Business Deductions that a LLC tax estimator can use to lower taxable income.

LLC tax calculator in action

Here’s how an LLC tax estimator works. First, you enter important details about your LLC, like your total income and expenses. The calculator then estimates how much you owe in federal and state taxes. It also helps you figure out self-employment taxes, if you owe them. You can input various deductible expenses, such as office supplies and travel costs. The calculator will subtract these from your total income to show your taxable income. Some calculators let you tweak your numbers to see how changes in income or expenses affect your tax bill. Let's use a real-life example to explain this. Say you run a consulting LLC and made an income of $150,000. You incurred business expenses like $13,000 for software subscriptions, $5,500 for office supplies, $5,700 for travel and $4,000 for professional fees. To estimate your tax liability and maximize deductions, you decide to use an LLC tax calculator. First, you enter your total income and deductible expenses into the calculator. Your expenses total $28,200. The calculator subtracts these expenses from income, resulting in a taxable income of $121,800. It then estimates your federal income tax based on this amount. You then calculate self-employment taxes, which cover Social Security and Medicare, as your LLC is taxed as a sole proprietorship. For a taxable income of $121,800, your self-employment tax estimate is about $17,210. This tax rate is 15.3% of your net earnings, though only 92.35% of this amount is subject to self-employment tax. The calculator also helps plan for tax payments and determine if you need to make quarterly payments to avoid penalties. Using the LLC taxes calculator shows you how much to set aside throughout the year to cover what you owe.

If I made $7,000 a year, how much business tax do I owe?

If you made $7,000 a year from your business, your business tax depends on several factors, including your location and business structure. For federal taxes, you’ll need to pay income tax and possibly self-employment tax. Since $7,000 is a relatively low income, your income tax might be minimal. For self-employment tax, which covers Social Security and Medicare, you'll pay 15.3% on your net earnings. For a $7,000 income, this amounts to about $991. Additionally, if you’re in one of the states that charge an extra business tax, you might owe a small amount there as well. The exact amount varies by state, so it’s a good idea to check your state’s specific rules or use a business tax calculator for accurate figures. FlyFin’s expert CPAs provide unlimited support on the app. They can prepare and file your returns, give you unique tax planning advice and AI can find deductions and calculate what you owe, saving you the most possible.

LLC tax loopholes

LLCs can use tax loopholes to lower taxable income and their tax bill. FlyFin offer expert CPA support to handle business taxes on the app.

LLC Tax Calculator

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How An LLC Tax Calculator Can Simplify Business Taxes