As a consulting LLC in California, understanding your tax obligations is crucial for financial health and compliance. This guide provides a clear overview of federal and California state taxes, deductions, quarterly obligations, common mistakes to avoid, and pro tips to optimize your tax strategy. You might also find our guide on how to register an LLC in California useful here. Forming your consulting LLC with Lovie's AI-powered platform can streamline these processes, ensuring accuracy and efficiency from the start.
California consulting LLCs have several tax structure options. By default, a single-member LLC is taxed as a sole proprietorship, while a multi-member LLC is taxed as a partnership. Both pass the income to the owner(s), who then pay self-employment taxes. Alternatively, an LLC can elect to be taxed as an S-Corp or C-Corp. This connects to our resource on forming an LLC in California, which covers the details. S-Corp election can reduce self-employment tax, but requires careful consideration. C-Corps are subject to corporate income tax in addition to individual income tax on distributions.
Single-member LLCs pay self-employment tax (15.3%) plus income tax on all net profits, reported on Schedule C of the owner's personal tax return.
Deduct expenses for the portion of your home exclusively used for business.
Deduct ordinary and necessary expenses such as software, subscriptions, marketing, and client meetings. Deduct one-half of your self-employment tax from your gross income.
Pay estimated federal income tax using Form 1040-ES.
Pay estimated California income tax using Form 540-ES. Pay the $800 California franchise tax. First year may be exempt depending on formation date. Use Form FTB 3522.
Start your formation with Lovie — $499 one-time, state filing fee included.
State-specific formation guides, cost breakdowns, compliance checklists, and expert comparisons — updated for 2026.