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How do LLC losses affect personal income taxes in the US?
The short answer is yes, losses get passed through to members. Limits/percentages do apply, primarily based on your share in the business. Check out the final post in this thread:  http://community2.business.gov/t5/Other-Business-Issues/Paying-oneself-in-a-LLC/td-p/16060  It's not a bad little summary of the profit/loss pass-through.  Regarding your 60K/60K example: the amount of money you earn in your day job will impact how much loss you can claim. Unfortunately I can't find anything more recent at the IRS or business.gov, but see this from 2004 - 40K was the limit before the amount you could claim against started to be mitigated: http://en.allexperts.com/q/Tax-Law-Questions-932/tax-loss-pass.htm HTH