Self-Employment Tax and K-1 Income: What You Need to Know | Monroe Township - Middlesex County
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Self-Employment Tax and K-1 Income: What You Need to Know

September 16, 2014

Filed under: Business Law,Business Planning — Tags: — Neel Shah @ 2:49 pm

What happens if you receive a K-1 from an LLC and there are self-employment earnings listed on line 14? Are you responsible for reporting those as subject to the self-employment tax? The self-employment tax is an additional payment of 15.3% to account for Medicare and Social Security.


We’re taking a page from the Tax Times blog today to talk about this issue. For the most part, a taxpayer’s portion of ordinary income from partnerships (including LLC’s) reported on a K-1 is indeed subject to the self-employment tax. There are, of course, exceptions. This requires the assistance of an experienced team of accountants and tax attorneys, since the solution for you likely depends on your individual circumstances, the state of formation for the LLC and whether the LLC is taxed as a pass-through entity. In any case, it could be worth your while to discuss this issue with a trained professional to learn whether you are liable for the self-employment tax or not.

To learn more about complicated tax issues and reporting of self-employment income, contact our offices at 732-521-9455 or through email at


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