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cdbetts2001
April 4, 2022
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If I am a sole owner LLC, do I use an owner equity account for estimated federal income tax and and both parts of self-employment tax payments?

  • April 4, 2022
  • 1 reply
  • 0 views
I understand that the owner's federal income tax liability is not a business expense but what about the employer side FICA tax?
Best answer by Rainflurry

@cdbetts2001 

 

I assume you are taxed as a sole proprietorship?  If so, you record all money taken out of the business as draws from your owner's draw equity account.  You do not record the employer-equivalent portion of self-employment as a business expense - you take that deduction as a reduction of your adjusted gross income on your personal return.   

1 reply

Rainflurry
RainflurryAnswer
April 4, 2022

@cdbetts2001 

 

I assume you are taxed as a sole proprietorship?  If so, you record all money taken out of the business as draws from your owner's draw equity account.  You do not record the employer-equivalent portion of self-employment as a business expense - you take that deduction as a reduction of your adjusted gross income on your personal return.   

C
cdbetts2001Author
April 4, 2022

Yes, I file a Schedule C.  Thank you for clarifying this for me.

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