Press Room: Article
Is that K-1 Income Subject to Self Employment Tax?
It is late spring and you receive a K-1 from a Limited Liability Company (LLC) in which you are a member. On line 14 of the K-1, there is a number being reported to you: self-employment earnings.
Is it correct? Should you be reporting your share of LLC income as self-employment earnings? If you do, you now have an additional tax to pay, called the self-employment tax. This self-employment tax is imposed in addition to the regular income tax you already pay, and is imposed on your self-employment earnings. The self-employment tax rate for self-employment earnings is generally 15.3%. However, for 2011, the rate is reduced to 13.3%.