| Is there a difference in Taxation of a Sole Proprietorship vs a Single Member LLC?
If you are a Single Member LLC, then really nothing changes as you will report the income from your activity on Schedule C, which is essentially the same as how reported earlier. Except that as a Single Member LLC, you include the LLC after your business name.
The Sole Member LLC, will report all the net income being subject to self-employment taxes, so the method of taxation will be essentially the same as if you were reporting the activity as a Sole Proprietor.
Clearly, the impact is a legal one, in that you now have limited liability protection which is exceedingly important in todays times of litigious world.
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