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How to calculate taxes for sole proprietorship or LLC in Culver City?

Hi I was wondering how to calculate all the taxes you anticipate owing based on what your NOI.

First I did it as sole proprietorship and assumed that it would be taxed at personal income tax rate.

It came out to 42.15% $210,771 with take home pay of $289,229

For LLC
I know there’s a self employment tax of 15.3% for SSN and Medicare, which looks like federal to me. Is there also a self employment tax in California that is also 15.3%?

I tried doing a hypothetical scenario of 500,000 after expenses for an LLC as well.

Net Income $500,000
Franchise Fee $800
Additional Franchise Fee $2,500 (500k-999k)
Federal Tax $76,500.00 (15.3%)

Taxes $79,800
Net Income After Taxes $420,200

At first I thought wow what a drastic difference but it looks way too good to be true- but then I read that if the income is distributed to you afterwards, it will be taxed as personal income? So do I take the 420,200 and use the personal income calculator to calculate taxes on that AGAIN?



View Reddit by lobsterpizzzzzaView Source

4 replies on “How to calculate taxes for sole proprietorship or LLC in Culver City?”

If you have to ask this on Reddit, you should just get an accountant. You certainly can afford it.

State Tax is just the state and no FICA.

Your mistake sounds like you are missing your deductions. But for Federal the IRS views the LLC as you. But you do have the self employment tax which is about 15% and you will be in whatever tax bracket you fall into.

The calculation is roughly like this :

Gross income minus expenses.

15.3% income tax on the first 138k. 4% in the dollars above that.

Then income taxes for federal and state. About 138k federal, 44k state.

Total taxes of about 220k in taxes.

Your 79k of federal taxes was all wrong. It assumed SECA on the full amount, but then didn’t include income tax. Social security tax phases our around 138k.

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