What taxes does an LLC pay?

A single-member LLC pays self-employment tax (15.3% on net profit) plus federal income tax (10-37% based on bracket) on all business income, reported on Schedule C of the owner's personal tax return. Multi-member LLCs file Form 1065 and each member pays tax on their share. LLCs do not pay a separate corporate tax unless they elect C-Corp taxation.

The LLC's default tax treatment is 'pass-through' — profits flow to the owner's personal return without corporate-level taxation. Beyond federal taxes, LLCs may owe: state income tax (varies by state, 0% in Wyoming/Texas/Florida), state franchise tax ($0-$800 depending on state), quarterly estimated tax payments (due April 15, June 15, September 15, January 15), and local business taxes. The most common tax optimization for profitable LLCs is electing S-Corp status to reduce self-employment tax on profits above a reasonable salary.