Send to a Friend

scruffpuff's avatar

As the owner of an LLC, how are my taxes calculated?

Asked by scruffpuff (187points) December 27th, 2009

I haven’t owned my LLC for very long (just two years) and I’m still a little confused as to how my taxes get calculated. My tax guy tried to explain it to me but I just got confused so I’d like to give it another shot.

Right now I’m a consultant so I don’t sell a product or anything (no sales tax). The LLC tax liability is pass-through so it goes to my personal taxes.

So if I invoice my client for a project and the invoice is for $1,000 I put 30% in the business savings account for taxes leaving around $667 dollars in the business checking account. Then I do a draw for $100 dollars as my ‘paycheck’ which goes to my personal checking account.

So how are these taxes calculated. Based on what my company was paid in the invoice ($1000) or based on my draws ($100) ???

Using Fluther

or

Using Email

Separate multiple emails with commas.
We’ll only use these emails for this message.