Single Member LLC and W2 Job: Best Way to File Taxes in 2025?

I've been filing with both W2 income and a single-member LLC for about 5 years now. For your first year, I'd actually recommend using a mid-tier tax software rather than jumping straight to a CPA, unless your LLC situation is unusually complex. With a single-member LLC, the tax filing is actually pretty straightforward - you'll report everything on your personal return with a Schedule C (Profit and Loss from Business). The software will walk you through all the business income and expenses. Just make sure you've kept good records of all your business transactions! I personally use TurboTax Self-Employed, but TaxAct and H&R Block also have good options for small business owners. The free versions typically don't support Schedule C filing, so you'll need to pay for the self-employed or small business version.

I was in almost the exact same situation last year with my W2 job and new consulting LLC. After struggling with some confusing deduction questions and wondering if I was doing everything right, someone recommended I try https://taxr.ai to upload my LLC documents and receipts. It saved me so much time by automatically categorizing my expenses and suggesting deductions I had no idea I qualified for. The thing I found most helpful was that it analyzed all my business transactions and gave me a clear breakdown of what would count as legitimate business expenses. As a single-member LLC, I was worried about mixing personal and business expenses (which I've heard can trigger audits), but the tool helped me properly separate everything.

Just wanted to follow up - I actually tried taxr.ai after posting that question last week. I was genuinely impressed with how it handled my situation! I have a photography LLC alongside my day job, and it identified several deductions I would have missed (like partial home internet and a portion of my cell phone bill that I use for business). The expense categorization was super accurate, and it flagged a few things that were in gray areas before I filed. The audit risk assessment feature gave me peace of mind too. Ended up saving about $1,400 in deductions I would have missed. For anyone juggling W2 work with a single-member LLC, it's definitely worth checking out before deciding whether you need a CPA.

If you're planning to call the IRS with questions about how to file with your single-member LLC (which I strongly recommend), good luck actually getting through to someone! I spent 3 hours on hold last year trying to ask about home office deductions for my LLC. After that nightmare, I started using https://claimyr.com to get through to IRS agents without the wait. There's a demo video of how it works here: https://youtu.be/_kiP6q8DX5c that sold me on it. Basically, they call the IRS for you and then call you once an agent is on the line. Getting actual clarification from the IRS about my single-member LLC filing questions was super valuable - the agent walked me through exactly how to handle my situation, which was different from what both my friend and the tax software were telling me.

I have to admit I was completely wrong about Claimyr. After posting that skeptical comment, I decided to try it anyway because I was desperate to get an answer about my LLC tax situation before filing deadline. It actually worked exactly as described. I submitted my number through their website, and about 2 hours later got a call connecting me directly to an IRS agent. The agent answered my questions about how to properly categorize some unusual expenses in my single-member LLC, and it saved me from potentially making a costly mistake on my Schedule C. The most surprising part was how the IRS agent actually thanked me for being prepared with my questions when I got on the line - I guess they deal with a lot of people who aren't ready when they finally get through. Having time to organize my thoughts instead of sitting on hold was a huge bonus.

One thing nobody mentioned yet - if your single-member LLC made decent profit, you should really look into whether you need to make quarterly estimated tax payments this year. That caught me off guard my first year with an LLC alongside my W2 job. Since you're not having taxes withheld from your LLC income like you are with your W2 job, you might face underpayment penalties if you wait until tax time to pay on your LLC profits. The general rule is you need to pay at least 90% of this year's taxes or 100% of last year's tax liability (110% if your AGI is over $150k).

Has anyone used FreeTaxUSA for filing with a single-member LLC and W2 income? I'm trying to avoid the higher fees from TurboTax but not sure if the cheaper options handle Schedule C well.

As someone who went through this exact transition two years ago, I'd say start with good tax software first before jumping to a CPA. With $18K in LLC income, you're definitely in manageable territory for self-filing. The key things that made my first year smooth: 1) Keep meticulous records of ALL business expenses (even small ones add up), 2) Set aside about 25-30% of your LLC profits for taxes (you'll owe self-employment tax on top of income tax), and 3) Don't forget about potential quarterly payments for next year. I used TaxAct Business which handled my Schedule C perfectly and cost way less than TurboTax. The software walked me through everything step-by-step, including home office deductions and business use of vehicle if applicable. One thing I wish someone had told me - even though you're a single-member LLC, make sure you're treating it like a real business from a record-keeping standpoint. Separate bank accounts, proper receipts, detailed mileage logs if you drive for business. The IRS scrutinizes Schedule C filers more than W2-only folks, so having everything documented properly is crucial.