Quarterly Tax reports

by Michael
(SC)

Hello,

I am planning to register a single member LLC. In parallel I am employed full time for a company (own business is not connected to full time work) there I receive regular payroll.

I am not sure if I have to report and pay estimated taxes quarterly to the IRS.
Also, I am not sure if my business needs an own tax number.

The LLC is only doing international or out-of-state business.

Thanks,

Michael

Answer

You LLC should get its own tax ID number (EIN, FEIN, Employer Identification Number).

Technically, you do have to pay quarterly estimated taxes no matter where you get your income--a wage, business, or other.

However, as a full-time employee, your employer pays estimated taxes for you.

To find out if you need to pay additional quarterly taxes, you need to do the worksheet on Form 1040-ES.

You can also make a guess as to your annual income and have that added to your withholdings at your employer.

If you do not make sufficient quarterly payments, you will be charged interest and penalties.

For most taxpayers with modest incomes, there is a safe haven where, if you make quarterly estimate payments equal to your previous year's tax liability, you will not be charged penalties.

But you still will owe the full amount of your tax liability (less any amounts already paid quarterly either by you directly or through your employer) at the end of the tax year.