CA corporate and LLC laws, liability of taxs for LLC and personal income, sole member LLC tax liability

An LLC is known as a "pass through" entity for tax purposes. This means that there is no separate corporate tax. Instead, it is usually taxed like a partnership.

While the previous answer was correct for Federal taxes, California does charge a corporate tax on LLC's and S Corps. It is about 8% of income with an $800 per year minimum. You are required to file Form 568 Limited Liability Company Return of Income. California Form 568 must be filed by the 15th day of the fourth month after the close of the LLC’s taxable year.

As far as what you are paying yourself, please consult a tax professional or tax attorney for your specific situation. In general you must take part of your business income as personal self-employment income. This is subject to Social Security and Medicare (and the California equivalents) as well as regular income tax rates. Amounts in excess of a reasonable salary can be taken as dividends at a much lower tax rate and exempt from Social Security. How much of each to take and declare is a case-by-case determination. There is no one size fits all solution so please consult a professional.

THIS ANSWER IS INTENDED AS A GENERAL DISCUSSION OF LEGAL ISSUES, AND NOT AS LEGAL ADVICE TO YOUR SPECIFIC SITUATION. WE DO NOT REPRESENT YOU IN THIS OR ANY OTHER MATTER. RELY ON THIS DISCUSSION AT YOUR OWN RISK.

I agree with the first answer for general issues. But, generally, LLC's do not pay Federal Income Taxes at the LLC level. You do pay payroll taxes for yourself. I have had clients who think that they dont pay taxes at all with an LLC. I kid you not. (lol)