Single member LLCs, often synonymous with small businesses, require careful attention to tax obligations and compliance. While excise tax may not apply, self-employment tax is a crucial consideration. Failing to file annual reports, maintain business licenses, and stay current with franchise and excise (F&E) requirements can lead to painful penalties. Dr. Friday emphasizes the importance of setting up an account on TNTAP to ensure compliance and avoid potential pitfalls.
Transcript
G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one minute moment.
Single member LLCs. For most of us that really just means a small business, a Schedule C on your 1040. And then you also have what’s called franchise excise in the state of Tennessee. Now you don’t pay the excise tax but you do actually have to pay self-employment tax. Understanding that you have to file it because that’s what happens with many people. They get somehow, they go on to Secretary of State, they set themselves up in an LLC, they forget to file the annual reports which is nothing to do with taxes, along with they forget their business license, their F&E. These are all very important and the penalties are painful. So go on to TNTAP, set up an account so you stay current.
You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 right here on 99.7 WTN.