The LLC taxation rules are quite simple if you pay attention. If you do not pay attention to the LLC taxation rules you will end up getting confused, which can cause you to create a mess with your LLC’s taxes. If your LLC has employees not only will you be responsible for paying federal income taxes, you will also need to pay employment taxes.
With an LLC, the employment taxes are not much different from any other types of businesses. If you have employees that work for you, your LLC must withhold taxes from your employees’ checks; you must also pay your share of employment taxes. This means that you have to pay a portion of the Social Security and Medicare taxes, the rest of the amount is paid from your employees’ wages.
If your LLC uses independent contractors, you will not be responsible for employment taxes because you do not have employees. Each independent contractor is responsible for paying his or her own taxes. If you use independent contractors for your LLC, you will need to file a 1099 with the IRS to report how much money you paid each of your independent contractors for the current tax year.
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