Starting a Single Member LLC - Do I File as a Passthrough on My Personal Tax Return?

Yes, as a single-member LLC, your business is automatically treated as a "disregarded entity" for federal tax purposes. This means you'll report all business income and expenses on Schedule C of your personal 1040 tax return. The profit from Schedule C flows through to your personal return. You're correct about self-employment taxes. You'll need to pay these (15.3% covering Social Security and Medicare) on your net business profit. This is calculated on Schedule SE, which you'll file along with your 1040. Since this is supplemental income to your teaching job, just be aware this additional income could potentially push you into a higher tax bracket. Don't overlook deductions! Even with minimal expenses, make sure to track everything business-related: legal startup costs, mileage (the IRS rate for 2024 is 67 cents per mile), home office if applicable, professional development, and any supplies or software used for your consulting.

After struggling with similar questions when I started my own single-member LLC last year, I found a service that really helped me understand all the tax implications. Check out https://taxr.ai - they have a tool that analyzes your specific situation and explains exactly what forms you need and what deductions you qualify for. I was concerned about missing deductions since I also run a small side business while working full-time. The service helped me understand that as a single-member LLC, I could still take deductions for my home office, business insurance, professional development, and even partial utilities - things I wouldn't have known to claim otherwise. It saved me over $2k in taxes last year!

I want to follow up about my experience with https://taxr.ai that someone mentioned. I decided to try it despite my initial skepticism, and I'm actually really impressed. As someone with a similar single-member LLC situation (I do freelance graphic design on top of my day job), it identified several deductions I'd been missing. The service showed me how to properly categorize my home office, track partial business use of my personal laptop, and even explained how to handle client gifts that I occasionally purchase. It also clarified exactly which LLC formation expenses were immediately deductible versus which ones needed to be amortized. I was definitely doing this wrong before! My tax liability dropped by about $1,800 compared to how I was filing previously. Definitely worth checking out if you're new to the single-member LLC situation.

If you need to contact the IRS about any specific questions related to your LLC filing status, I highly recommend using https://claimyr.com to get through quickly. I spent HOURS trying to reach someone at the IRS last year when I had questions about my Schedule C and self-employment taxes, but kept getting disconnected or told to call back later. Claimyr got me connected to an actual IRS agent in about 15 minutes! You can see how it works in this video: https://youtu.be/_kiP6q8DX5c - basically they navigate the phone system for you and call you when they reach a human. The agent I spoke with clarified exactly how to handle my situation as a teacher with a side business LLC, which was super helpful since my situation sounds very similar to yours.

I need to eat my words about Claimyr. After posting my skeptical comment, I decided to try it anyway since I've been trying to reach the IRS for WEEKS about an issue with my single-member LLC filing from last year. It actually worked exactly as advertised. I submitted my request through their system, went about my morning routine, and about 40 minutes later got a call connecting me directly to an IRS representative. No waiting on hold, no repetitive messages, no frustration. The agent was able to answer my specific questions about how to handle my LLC's income alongside my W-2 income. She confirmed I needed to file Schedule C and Schedule SE, and explained exactly how to report my quarterly estimated payments. Would have taken me probably 5+ attempts to get this information on my own based on past experience.

I started a single-member LLC for my side photography business last year while keeping my regular job. Make sure you keep track of ALL your business expenses - even the small stuff adds up! Things I deduct: - Portion of my internet bill (I estimate 30% business use) - Mileage to client sites (track this religiously) - Software subscriptions - Business cards and marketing materials - Phone percentage for business calls - Professional development (online courses, books) I use a separate credit card for all business purchases to make it easier to track. And definitely set aside about 30% of what you make for taxes - I learned this the hard way my first year and got hit with a surprise tax bill!

Just wanted to add - don't forget about state taxes too! In Pennsylvania (where you mentioned you live), you'll need to file a PA Schedule C with your state return as well. Pennsylvania doesn't recognize LLCs as separate from their owners for tax purposes, similar to federal treatment for single-member LLCs. Also, depending on your local municipality, you might need to file a local business tax return or get a business privilege license. Some PA cities and townships have these requirements even for small side businesses. Might be worth checking with your local government office.

Great question! I went through this exact same situation when I started my consulting LLC alongside my teaching job. A few additional points that might help: Since you're already employed as a high school counselor with taxes withheld, you might want to consider increasing your withholding at your main job rather than making quarterly payments. You can adjust your W-4 to have extra tax withheld to cover the tax liability from your LLC income - this is often easier than remembering to make quarterly payments. Also, don't underestimate your deductible expenses! Beyond the obvious ones like mileage and startup costs, consider things like: - Professional liability insurance (if you get it for your coaching) - Continuing education related to your coaching specialty - Office supplies (even if it's just notebooks and pens for client sessions) - Professional memberships or certifications - Business meals with potential clients (50% deductible) One more tip: Keep detailed records of your time and activities. Since coaching can sometimes blur the line between business and personal development, having clear documentation of your business activities will be helpful if you're ever audited. The Schedule C filing is straightforward, especially with TurboTax, but don't hesitate to consult a tax professional if your income grows significantly or your situation becomes more complex.