[katattack]

I am the sole owner of a new LLC.
I have one business client.
I am wondering how taxes work.
I have been researching on the irs website about self employment tax and am prepared to do that myself.
My question is, does my client have to take any taxes from my compensation? The business pays my business directly.
I've been spending alot of time on the irs website and can't find this detail.
thank you,
Kat

[katattack]

I got the answer to my question through the IRS small businesses tax tutorial.
I guess i'm not allowed to post the link yet, but here is what i can post: irs.gov/businesses/small/article/0,,id=200274,00 dot html
It is really helpful. At least for me!

[GlobalWealth]

Originally Posted by katattack

I am the sole owner of a new LLC.
I have one business client.
I am wondering how taxes work.
I have been researching on the irs website about self employment tax and am prepared to do that myself.
My question is, does my client have to take any taxes from my compensation? The business pays my business directly.
I've been spending alot of time on the irs website and can't find this detail.
thank you,
Kat

I did not follow your link, but I will answer. Your client will not make any deductions from your payment. The client company may or may not issue you a 1099, but you will need to record this as revenue and allocate expenses to pay tax on your net income. You may also want to consider an S-corp election for your tax status. I believe this is form 2553, but confirm with your accountant. Depending on your net income, this allows you to save some money on the self employment tax.