New LLC

Forum|Forum|1 year ago
August 28, 2024
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Hi there! I retired from my corporate job last year and created an LLC inFebruary try to sell my handmade items/art on Etsy, Makerplace, etc. I have spent about 2k in startup costs (setting up LLC, materials, listing fees, etc.) to date, started my shops in May/June....but have so far only had 3 sales totalling less than $150. I just found out that LLC should be filing quarterly estimated taxes. I was hoping to just make a few hundred dollars a month for extra retirement play money. Should I submit for September? How do I estimate?

dsoile

Hello Lisa

Here are some questions to answer to guide you as to whether or not to make quarterly tax payments

Will you owe less than $1,000 in taxes for the tax year after subtracting your federal income tax withholding from the total amount of tax you expect to owe this current year?
Do you expect your federal income tax withholding to amount to at least 90 percent of the total tax that you will owe for this current tax year?
Do you expect that your income tax withholding will be at least 100 percent of the total tax on your previous year's return?

If the answer is no to all these questions, then you have to make estimated tax payments

Determining how much to make in estimated tax payments is going to vary from taxpayer to taxpayer, depending on a variety of factors (profitability of business or side-hustle, how much you can afford to set aside for estimated tax payments, prior year tax liability, if any, etc.).

LisajanelAuthor

Some additional info to the above. I lived off savings until May and just recently started taking regular disbursements from my 401K, of which I already have Federal and State taxes withheld at an appropriate percent. So, I am already paying taxes for that retirement income. Plus, I expect I'll get a refund on some of that, as after deductions, my taxes will likely be less than what I've paid.