W2 employee and Single member LLC

Forum|Forum|1 year ago
August 28, 2024
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Hi,

I'm a W2 employee and also formed a single member LLC this year. I don't have any income for my LLC yet. Do I need to make estimate payments? What amount should I based on? Should I estimate the tax based on both my W2 income and expected LLC income? Thank you.

Best,

Jane

FranklinF

Should you firmly believe that by the end of the tax year you will definitely have SELF-EMPLOYMENT INCOME, then you should assign to Estimated Tax Payments about 15.3% of your Self-Employment Earnings.

In addition, I am assuming that your LLC is a Single-Member LLC (SMLLC) and that you have NOT made an Election to be treated as a different Tax Entity, thus, any income derived from your business activities will flow to your personal tax return using IRS Form Schedule C (Profit or Loss from Business).

Should you actually overpay your taxes, you will get a refund, however, should you underpay your taxes, in addition to the money that you already owe, you will be hit with penalties and interests.

You can have a more accurate calculation of your Estimated Tax Payments by using a Tax Calculator where you can input the other circumstances surrounding your next year tax filing obligations (ALL SOURCES OF INCOME, 1099's, W-2's, etc.).
Tax Calculator 2023

Lastly, below are the Estimated Taxes Deadlines:
1. April 15th
2. June 15th
3. September 15th
4. January 15th
When to Pay Estimated Tax

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jane20241Author

Hi,

Thank you for your response. I do have a SMLLC. If my LLC income is $5,000 at the end of year and my other personal income is $10,000, should I make the estimated tax based on $5000 or $15,000?

Thanks,

Jane

FranklinF

Even if your overall income is low enough NOT to trigger a Tax Liability situation, you will ALWAYS pay taxes on Self-Employment Income. Once again, the Tax Calculator will give you an even better estimate of your tax liabilities.

Tax Calculator 2023

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