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Hi - I have an EIN for my business, but 100% of what I earn through it comes in a W-9 from the company that I contract under. I’m making a small amount from this business. My full-time job is salaried and I have considerable withholdings each month when I receive my check. I filed my personal taxes reporting the complete W-9, which of course is connected with my EIN. 1) Am I still supposed to file the business tax separately / additionally, even though that income has already been reported and taken out of my personal taxes refund? And am I supposed to be reporting business tax quarterly since it’s a commission-based income? I’m hoping to grow business, but it’s been hovering under $5000 a year in additional income.
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If you think you might owe 1,000 or more on your tax liability it is a good idea to make estimated tax payments. This will not only help you reduce your tax bill but also to eliminate any penalties and interest on a balance due. The IRS has a good income tax estimator to help you decide if making estimates are necessary and how much you should pay.
Thank you! I accidentally asked this twice, because the platform said it couldn’t submit the question.
Before I answer this, I'd like to clarify a few things about how I am reading your question. When you say that 100% of your income for the business comes in a W-9, I am assuming you mean a 1099. And when you say you filed your personal income tax return reporting the complete W-9, I again assume you mean that you included the 1099. A W-9 form contains no income; it only includes your name and Social Security or EIN. It is given to the business you are contracting with, and they use it to prepare and give you a 1099. The 1099 is what contains your income for tax purposes.
If you are a single member LLC or sole proprietor, you do not need to file a separate business tax return. There is not a quarterly business tax return either, but I believe what you are referring to are quarterly estimated tax payments, which 1099 income recipients do use to avoid underpayment penalties. You said that you have considerable withholding already from your paycheck. I suggest you run a projection for the entire year and see where you land. If you will likely owe, then make the quarterly estimated tax payments. If you'll have a refund, then I'd not pay anything. Here's a tax calculator you can use: TaxCaster Tax Calculator. Note: the calculator is still pointed to the 2024 tax year, but you can still use it to reasonably estimate 2025. Just answer the questions as if it's 2025 instead of 2024.
I hope this extra info is helpful! Please post again if you have any other questions about this. Thanks!
Oh, yes, 1099. Thank you for clarifying!
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