Taxes for an LLC

[brucermarks]

I have two questions:

1.  Which TurboTax product do I buy in the spring to do my personal taxes and a simple LLC?

2. I earned approx. $30k during the first 6 months of the year thru my LLC, do I need to submit tax payments if my total tax for the year will still be LESS than last year?

Thanks.

[xmasbaby0]

If you have self-employment income from a sole proprietorship, then you will need online Premium or any version of the CD/download so that you can prepare a schedule C for your business expenses.

If you expect to owe at least $1000 at tax time, making estimated payments can help you avoid an underpayment penalty or a big tax bill at tax filing time.

If you have self-employment income for which you will pay self-employment tax for Social Security and Medicare,  you will need to use online Premium software or any version of the CD/download so that you can prepare a Schedule C for your business expenses.

https://ttlc.intuit.com/questions/2926899-how-does-my-side-job-affect-my-taxes

https://ttlc.intuit.com/turbotax-support/en-us/help-article/form-1099-nec/1099-nec/L5qTsBiSe_US_en_U...

https://ttlc.intuit.com/community/self-employed/help/how-do-i-report-income-from-self-employment/00/...

https://ttlc.intuit.com/community/self-employed/help/what-is-the-self-employment-tax/00/25922

https://ttlc.intuit.com/questions/2902389-why-am-i-paying-self-employment-tax

https://ttlc.intuit.com/questions/1901340-where-do-i-enter-schedule-c

https://ttlc.intuit.com/questions/3398950-what-self-employed-expenses-can-i-deduct

https://blog.turbotax.intuit.com/self-employed/self-employed-tax-deductions-

calculator-2021-2022-50907/

https://ttlc.intuit.com/questions/1901110-do-i-need-to-make-estimated-tax-payments-to-the-irs

https://turbotax.intuit.com/tax-tools/calculators/self-employed/

[DoninGA]

If you are a single member LLC that has not incorporated then the IRS regards your business as a disregared entity and you use Schedule C to report your Self-Employment income and expenses.  Schedule C is included with your personal tax return, Form 1040.

You can use any of the TurboTax desktop editions for your tax return but the Home & Business edition would be recommended.  Especially if this is your first time dealing with self-employment income and expeses.

If you decide to use the TurboTax online editions then you will need the Premium edition.

TurboTax website for the 2023 desktop CD/Download editions - https://turbotax.intuit.com/personal-taxes/cd-download/

TurboTax website for the 2023 Premium online edition - https://turbotax.intuit.com/personal-taxes/online/premium/

However, if you are a multi-member LLC, Partnership or S Corporation you will need to use the TurboTax Business Edition.  The Business Edition can only be installed on a Windows based personal computer.  The Business Edition cannot be used for a personal tax return, Form 1040.

TurboTax website for the 2023 Business Edition - https://turbotax.intuit.com/small-business-taxes/cd-download/

Underpayment of taxes penalty -

Most taxpayers will avoid this penalty if they either owe less than $1,000 in tax after subtracting their withholding and refundable credits, or if they paid withholding and estimated tax of at least 90% of the tax for the current year or 100% of the tax shown on the return for the prior year, whichever is smaller.

However, since you will also have Self-Employment income you have to take into consideration the Self-Employment taxes on your SE net income for the year.

For example, if your SE net income is $30,000 you need to multiply that income by 92.35 percent and then multiply the result by 15.3 percent - $30,000 (*) 0.9235 (*) 0.153 = $4,239 Self-Employment taxes.

Estimated tax payments for tax year 2024 can be paid using the IRS payment website - https://www.irs.gov/payments

[VolvoGirl]

What kind of LLC do you have?   If it is a SMLLC, Single Member LLC that is NOT an S corp then it is a disregarded entity and you file it on schedule C in your personal 1040 return.  For all other LLCs you need to file a separate Business return.  

You probably should make quarterly estimated tax payments to cover the  income tax and self employment tax.    

For SE self employment tax - if you have a net profit (after expenses) of $400 or more you will pay 15.3% SE Tax on 92.35% of your net profit in addition to your regular income tax on it. So if you have other income like W2 income your extra business income might put you into a higher tax bracket.

You must make quarterly estimated tax payments for the current tax year if both of the following apply:
- 1. You expect to owe at least $1,000 in tax for the current tax year, after subtracting your withholding and credits.

- 2. You expect your withholding and credits to be less than the smaller of:
90% of the tax to be shown on your current year’s tax return, or
100% of the tax shown on your prior year’s tax return. (Your prior year tax return must cover all 12 months.)

The 1040ES quarterly estimates are due April 15, June 17, Sept 16 and Jan 15, 2025. Your state will also have their own estimate forms.

How to make the Estimated payments
https://ttlc.intuit.com/community/tax-payments/help/how-do-i-make-estimated-tax-payments/00/25875

Here are the blank Estimates and instructions…..
https://www.irs.gov/pub/irs-pdf/f1040es.pdf

Or you can pay on the IRS website. Be sure to pick 2024 1040ES payment
https://www.irs.gov/payments