A limited liability company is a pass-through business by default. That means the LLC itself usually pays no federal income tax; instead, its profit flows onto your personal return (Form 1040) and you pay two layers of federal tax on it — self-employment tax and federal income tax — plus whatever your state charges. This LLC tax calculator stacks those layers so you can see your real effective rate before you set aside money for estimated taxes.
Enter your annual net profit, choose your filing status, and add your state rate. Every figure updates instantly. The result card splits the bill into self-employment tax, federal income tax, and state tax, then shows your total burden and the effective percentage of profit you actually keep.
How to Use
- Enter your Annual Net Profit — Schedule C line 31 profit, or your share of a partnership K-1, after legitimate business expenses. Do not subtract owner draws; those are not a deductible expense.
- Set your Filing Status. This picks the 2024 federal brackets and the standard deduction ($14,600 single or $29,200 married filing jointly).
- Add your State Income Tax Rate if your state charges one. For Texas, Florida, Washington, Nevada, Wyoming, South Dakota, and Alaska there is no state income tax, so leave it at 0.
- Read the result card. Self-Employment Tax is the Social Security and Medicare levy, Federal Income Tax is the progressive bracket tax, and Total LLC Tax Burden is the number that should drive your quarterly estimated-tax savings.
- Use the Effective Tax Rate to budget. If it lands near 25–30% on $100k–$200k of profit, setting aside that percentage of every customer payment is a safe default.
How the Math Works
An LLC with one owner is a "disregarded entity"; an LLC with two or more owners is taxed as a partnership. In both cases, profit passes straight to your 1040, and the IRS applies two taxes:
- Self-employment tax. You pay both the employee and employer side of FICA: 12.4% for Social Security plus 2.9% for Medicare, or 15.3% total. The IRS first reduces the base by 92.35%, so the formula is SE tax = net profit × 0.9235 × 0.153.
- The half-SE deduction. You get to deduct half of that self-employment tax on Form 1040 — this is the "above-the-line" adjustment, worth 0.5 × SE tax.
- Federal income tax. Taxable income equals net profit minus the half-SE deduction minus your standard deduction. Progressive 2024 brackets (10%, 12%, 22%, 24%, 32%, 35%, 37%) are applied band by band.
On a $150,000 single-member LLC profit: the SE base is $138,525, SE tax is about $21,194, the half-SE deduction is $10,597, taxable income is roughly $124,803, federal income tax is about $22,995, and the total federal bill is near $44,189 — an effective rate of about 29.5%. That is the number most new LLC owners miss: they budget 22% and are shocked at quarter-end.
Examples
Example 1 — A freelancer at $150,000. A single web designer runs a single-member LLC. Net profit is $150,000, filing single, no state tax. Self-employment tax is $21,194; federal income tax after the half-SE deduction and standard deduction is $22,995. Total federal tax is $44,189, an effective rate of 29.5%. Setting aside 30% of each invoice covers the bill without surprises.
Example 2 — Married couple at $200,000 in a 5% state. A husband-and-wife LLC nets $200,000 and files jointly. SE tax is about $28,259; federal income tax on the joint brackets is about $24,574; state tax at 5% adds roughly $7,834. Total tax is $60,666, an effective rate of about 30.3%. Notice how joint filing and the larger standard deduction soften the federal bite, while the state line still adds up.
Example 3 — A profitable business at $1,500,000. At seven-figure profit, the marginal rates climb into the 32% and 35% bands. Self-employment tax is roughly $211,943, federal income tax about $468,576, and the combined federal burden lands near $680,520 — an effective rate above 45%. At this level the simplified calculator ignores the Social Security wage-base cap and QBI deduction, so a CPA and an S-election analysis are strongly recommended.
FAQ
How much tax does an LLC pay?
By default an LLC pays no entity-level federal income tax. Instead, the owner pays self-employment tax (15.3% on 92.35% of profit) plus federal income tax through progressive brackets, then state tax. On $150,000 of profit, a single owner pays roughly $44,000 in federal tax — about a 29% effective rate.
Is an LLC taxed differently than a sole proprietorship?
Taxed the same. A single-member LLC is a "disregarded entity" and files the same Schedule C as a sole proprietor, with the same self-employment tax. The LLC gives you liability protection, not a different tax bill. The difference only appears if you elect S-corp or C-corp status.
What is the 92.35% self-employment adjustment?
The IRS lets you deduct the "employer equivalent" half of SE tax before computing the levy itself. The combined effect is that you pay 15.3% on 92.35% of net profit, which equals an effective rate of 14.13% on the full profit. This is why the SE tax on $150,000 is $21,194 and not $22,950.
Should I elect S-corp status to save LLC tax?
Sometimes. An S-corp lets you split profit into a "reasonable salary" (subject to SE/FICA tax) and distributions (not subject to SE tax). Once net profit comfortably exceeds $60,000–$80,000, the savings can justify the payroll and accounting cost. This calculator models the default LLC; run S-election numbers with a CPA before committing.
How much should I set aside for LLC taxes?
A safe rule of thumb is 25–30% of net profit for federal tax in the $100k–$200k range, plus your state rate. Use the effective-rate figure from this calculator as your savings rate, and pay quarterly estimated taxes (Form 1040-ES) to avoid underpayment penalties.
Does the standard deduction apply to LLC owners?
Yes. Because an LLC is pass-through, your business profit is reduced by the same standard deduction available to all filers ($14,600 single, $29,200 married in 2024), on top of the half-self-employment deduction. That is why taxable income is lower than raw net profit.
Are owner draws or distributions taxable to the LLC?
No. Owner draws are not a deductible business expense and are not taxed separately — they are withdrawals of profit that was already taxed when the LLC earned it. Do not subtract draws from net profit when using this calculator.
Disclaimer
This LLC tax calculator is provided for informational purposes only and does not constitute tax, legal, or accounting advice. It uses simplified 2024 federal brackets, a flat state rate, and omits the Social Security wage-base cap, the QBI deduction, local taxes, and itemized deductions. Actual liability depends on your filing details, deductions, and state rules. Always confirm your estimate with a qualified CPA or enrolled agent before filing or making estimated tax payments.