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I would like to know how a person gets taxed for income from a job and separate income from a LLC that I operate as my own business in the US. For example, if I generate 100k from my job; and if I generate 20k from the LLC and after expenses, if I make 10k from it as profit, do I get taxed for 100k+10k or 100k separately and 10k separately?

If I get taxed separately, then is there a minimum income threshold, for the income from the LLC, until which I don't get taxed?

Update:

I am not very knowledgable about company types. But, I am going to start the LLC alone or with my wife as a director. I did a little reading on S-Corps, and I don't think for now, I wouldn't incorporate the company as a S-Corp

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    What's the underlying structure of the LLC? Sole proprietor? Partnership? S corporation? – Ben Voigt Feb 17 at 17:33
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    There is no minimum threshold. You will definitely be taxed on the $10k from the LLC, but how much depends on the structure of the LLC. For the purposes of your hypothetical you can assume the tax amount will be similar to as if you made $110k from your regular job and didn't have the LLC. – TTT Feb 17 at 17:39
  • @BenVoigt, I updated the question. Basically, I don't think it will be a S-Corp. – c00der Feb 17 at 18:10
  • @TTT, thanks, does that mean there's no point incorporating an LLC? Just go as a sole proprietor? – c00der Feb 17 at 18:12
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    There are some benefits or incorporating vs SP, though they are mainly legal protection. There are some additional tax savings of S-Corp or LLC taxed as an S-Corp, mainly that you can possibly save on some FICA tax. Then there are additional tax savings for pass-through entities. But ballpark, you'd probably need profits of $20K or more on the business to make those tax savings worth the extra cost of creating and maintaining a corporation. – TTT Feb 17 at 19:13
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In the US we are taxed on total income. There are things that reduce our taxable income, and credits that reduce the amount of tax we owe, but it starts with all of our income. If your business is a pass-through entity then the business pays no tax independently and the business profit is counted towards your total income.

So, if you have 100k in taxable income and are married then your top marginal rate might be 22%, that means the 10k of business profit would be taxed at 22%. Currently there's a deduction for pass through income, assuming you qualify only 8k of that profit would be subject to tax at your top marginal rate. Also, your business income would be subject to self-employment tax.

In the scenario you describe there's not a threshold that makes your business irrelevant for tax purposes. If you already have an obligation to file a tax return then you are required to report any business income. If you were otherwise not required to file a tax return and your business earned less than $400 you wouldn't have to file a tax return.

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