Self-employment tax is the Social Security and Medicare tax that self-employed individuals must pay. For LLC owners, this applies to all business profits unless they elect S-Corporation taxation. The current self-employment tax rate is around 15.3%. While this tax can be significant, LLC members can often deduct half of it on their personal tax return. Planning ahead for these payments helps prevent surprises at tax time. Many owners make quarterly estimated tax payments to stay compliant.
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