Q: I am a solo practitioner (lawyer) with an LLC. I file one tax return for myself and for the LLC. Does it matter whether
I report income to me personally or to the LLC? Is there a tax advantage for doing either?
A: Typically an LLC's income would be reported on your own tax return on a Schedule C and you would pay self-employment taxes on any net income. If you have filed a S Corporation election for the LLC, then the LLC would file a separate tax return. In that case, it comes down to a fact-specific question of whether you accrued the right to payment in your own capacity or in the capacity of an employee of the LLC (as you would need to be an employee on payroll of the LLC for S Corporation purposes). This is a very fact-intensive inquiry if it is at all questionable as to which entity (you or the LLC) earned the income. I suggest getting an experienced tax professional to help you with your tax filings.
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