Filing Taxes for a Single Member LLC in 2025 - Guidance Needed

Hey tax folks, I'm super stressed about filing taxes for my single member LLC for the first time. I started a handmade jewelry business last summer and officially formed an LLC in October. Sales have been better than expected (about $28,000 for the partial year), but I have no idea what I'm supposed to do tax-wise. I've been putting aside roughly 30% of my income for taxes, but I'm confused about which forms to file, deductions I can take, and whether I need to file quarterly estimated taxes going forward. My main questions are: 1. Do I file my LLC income on my personal tax return or submit separate business returns? 2. Can I deduct my home office space and materials costs? 3. What's the deal with self-employment taxes for a single member LLC? I've been using regular tax software in previous years, but not sure if that'll work for my business income. Any advice from other small business owners or tax pros would be super appreciated!

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18 comments

Dmitry Popov

•8M

Good news - filing taxes for a single member LLC is simpler than you might think! Your LLC is considered a "disregarded entity" for federal tax purposes, which means you don't file a separate business tax return. You'll report all your business income and expenses on Schedule C (Profit or Loss from Business) that gets attached to your personal Form 1040. The profit from your Schedule C will flow through to your personal return and that's what you'll pay income tax on. For self-employment taxes, you'll need to complete Schedule SE. This covers your Social Security and Medicare taxes (the equivalent of what would be withheld if you were an employee). The self-employment tax rate is about 15.3% on your net business income. For home office deduction, you can claim it if you have a space used exclusively and regularly for your business. You can either use the simplified method ($5 per square foot, up to 300 sq ft) or the regular method (calculating actual expenses). And yes, material costs for your jewelry business are absolutely deductible as business expenses. Be sure to keep good records of all business-related purchases.

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Dmitry Popov

•8M

You can use just your SSN if you don't have employees, but I generally recommend getting an EIN anyway as it helps keep your personal and business identities separate and many banks require it to open a business account. For quarterly payments, if you expect to owe $1,000 or more in taxes for the year, you should make quarterly estimated tax payments to avoid underpayment penalties. With $28,000 in revenue, you'll likely exceed that threshold, so I'd recommend setting up quarterly payments using Form 1040-ES.

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StarSailor}

•8M

I was in the exact same situation last year with my candle-making business! After struggling with all the paperwork and accidentally missing some deductions, I started using https://taxr.ai to analyze my business expenses and it was a lifesaver. The system automatically categorized all my receipts and business transactions, told me exactly which expenses were deductible for my single member LLC, and even flagged some home office deductions I was missing. It generated a perfect Schedule C that I just transferred to my tax return. For single member LLCs like yours, it specifically helps sort out personal vs. business expenses and calculates your self-employment tax correctly. Saved me hours of research and probably thousands in deductions I would've missed!

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StarSailor}

•8M

Yes, it actually has a feature specifically for mixed accounts! It uses AI to identify which transactions are business-related based on the merchant, amount patterns, and descriptions. You can review its suggestions and confirm which ones are business expenses. It learns from your corrections too, so it gets better over time. For inventory tracking, absolutely! The system has specific templates for product-based businesses that help you separate materials costs from finished goods inventory. It even handles cost of goods sold calculations correctly on your Schedule C, which is super important for businesses like furniture making where you might buy materials in one tax year but sell the finished product in another.

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Zainab Ismail

•8M

Just wanted to follow up about my experience with taxr.ai that someone recommended here. I was skeptical about tracking my custom furniture business inventory, but I gave it a shot. The system was actually really intuitive for separating materials costs from finished products. It automatically identified my lumber yard purchases as materials and correctly calculated my cost of goods sold. When I submitted everything to my accountant, she was impressed with how organized everything was. I found several additional deductions for my single member LLC that I had been missing in previous years, particularly around vehicle use for picking up supplies and delivering finished pieces. Definitely recommending it to other maker-business friends!

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Connor O'Neill

•8M

For anyone struggling to get answers from the IRS about single member LLC questions (which was me last month), I finally had success using https://claimyr.com after waiting on hold forever trying to call them directly. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c I had specific questions about home office deductions for my LLC and needed clarification on some 1099 issues with contractors I hired. The service got me connected to an actual IRS agent in about 20 minutes instead of the 3+ hours I spent trying on my own. The agent walked me through exactly how to handle these situations on my Schedule C and which record-keeping requirements apply specifically to single member LLCs.

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Connor O'Neill

•8M

It doesn't just call for you - they use a system that navigates the IRS phone tree and waits on hold in your place. Then when they reach an actual agent, they call you to connect. So instead of you personally waiting on hold for hours, their system does it and only calls when there's a real person ready to talk. No, definitely not a scam! I was super skeptical too. The difference is they have technology specifically designed to navigate the IRS phone systems more efficiently. I waited weeks trying to get through on my own before trying this. When they did connect me, I was talking to a legitimate IRS representative who answered all my LLC tax questions. The time savings alone was worth it because I was able to work on other things instead of sitting on hold for hours.

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Keisha Robinson

•8M

I need to eat some crow here. After posting that skeptical comment about Claimyr, I decided to try it anyway out of desperation. I had been trying to get clarification about home office deductions for my single member LLC for weeks. I was shocked when I got a call back in about 35 minutes with an actual IRS agent on the line. The agent walked me through exactly how to calculate my deduction and which form to use (they recommended the simplified method for my situation). They also clarified some questions I had about vehicle expenses related to my business. Saved me countless hours of hold music and frustration. Sorry for doubting - sometimes things actually do work as advertised!

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GalaxyGuardian

•8M

Michigan is much more reasonable than California! They have an annual LLC filing fee of just $25 (due February 15th each year). You'll need to file an annual statement to maintain your LLC status. For sales tax, Michigan requires you to collect sales tax on in-state sales. For out-of-state sales, it depends on your sales volume in each state and their specific economic nexus laws. If you're selling through platforms like Etsy or Amazon, they might handle this for you in many states. But if you're selling through your own website, you'll need to research each state's requirements. Generally, if you have less than $100,000 in sales or fewer than 200 transactions in a state, you might be exempt from collecting sales tax there.

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