THE MOMENT IT CLICKS
Your LLC filed nothing. It just sat there being disregarded.
You paid a formation service and got your confirmation email. You told yourself the tax problem was handled. It wasn't, because a single-member LLC has a default IRS status most creators never read the fine print on. If you are the only member, the default is disregarded entity: for tax purposes the IRS treats the LLC as if it doesn't exist, and every dollar of profit flows straight to your personal Schedule C, taxed at the full 15.3% self-employment rate on top of income tax. Add a second member, a spouse, a business partner, a co-creator, and the default changes entirely: a multi-member LLC is taxed as a partnership by default, filing its own Form 1065 and issuing K-1s, with no election required to get there. Neither default status lowers your self-employment tax on its own; only an active election to be taxed as an S-corp does that, filed on top of whichever default you started with. The formation service that set up your LLC almost never files that second election, because it is a tax decision, not a state filing, and the two happen in completely different offices.
Do this today: Pull up your LLC's default tax classification today. Most single-member LLCs sit as a disregarded entity unless someone filed to change it.
