“I have a Single-Member LLC and have not given up my Disregarded Entity status. I have no employees. I pay myself no wages and no salary. Every so often I take Owner Draws from the company and this is the money I use to live on.”======= For IRS purposes. a SMLLC is a disregarded entity. Ultimately when you file your 1040, you will have to report all profits reported on Sch C/ Sch SE of 1040 whether the funds stay in your business bank account or not. You, as a SMLLC owner, would pay yourself through the equity account owners draws. This essentially will keep an accurate record of what you pay yourself from the current year's profit without inaccurately decreasing the amount of profit that will show on your financial reports at the end of the year. So, since you elected to be taxed as a “disregard entity, you will be taxed as a sole proprietor. That means that ALL business profit flows to your schedule C. There is really no need to pay yourself a salary. The best thing to do is to write a check to yourself as cash flow allows, tracking that in a ‘draw’ account.
“I want to create a SEP-IRA to save for retirement in a tax-deferred manner. My tax preparer has told me the amount I am able to contribute for last year, and I have chosen a brokerage with whom I would like to create the SEP-IRA.”======= When you start your own business, one of your goals is to save more for retirement, but the other plans’ costs were too excessive. the best option is the SEP-IRA, which offered you a popular low-cost alternative.An SEP is ideally suited for small businesses and may be established by any business owner, including sole-proprietorships. The SEP is attractive to small businesses because it is easy to establish and administer. If you want to establish a retirement plan for your business and you missed the last deadline to establish a qualified plan, you may want to consider establishing an SEP. While qualified plans must be established by the end of the plan year ,Dec 31 for plans maintained on a calendar year, SEPs may be established by the business's tax-filing deadline, including extensions. This plan also offers many other attractive features. You may decide each year whether to contribute to the SEP. This is an attractive feature for a new business that has not established a trend in its annual earnings. Because of this flexibility, you could decide to forgo the SEP contribution in years when profits are less than anticipated.ALSO, you, as a business owner, may be eligible to receive a tax credit for expenses incurred when establishing the SEP. You may also be able to deduct plan expenses, including contributions made to the plan; small business owners find the SEP IRA attractive because of its minimal administrative requirements. Unlike qualified plans, the SEP does not require non-discrimination testing or filing of 5,500 returns. Establishing an SEP IRA can be easy. Unlike employers with qualified plans, the employer of an SEP has no responsibility for providing assistance with investing plan contributions. Individual participants may select their own IRA provider and direct their investments.