New Consulting Business

[Haden Roye]

I started an LLC in February 2024 with my first client. My sole proprietorship LLC has done around 75K in sales YTD, but I have not filed any quarterly taxes. Do quarterly taxes start after you first year or immediately?

[John-H2021]

Hello, your quarterly taxes start the first year you go into business in your case 2024.

Here is a good article on estimated taxes and how and when to make them.

https://turbotax.intuit.com/tax-tips/small-business-taxes/estimated-taxes-how-to-determine-what-to-p...

Also remember you only pay taxes on your net income ( gross income minus expenses)

[Haden Roye]

Can I file this through turbo tax? Also am I able to deduct things like home office, internet, cell phone, and other bills quarterly? If so where can I find the form on turbo tax to start this process?

[John-H2021]

There is no form for estimated taxes to file,  you would estimate what you owe for the quarter and send that to the IRS https://www.irs.gov/payments

Next year when you file with TurboTax it will walk you through entering all the self employment income and expenses. 

You may be able to take a home office if it qualifies here is information about a home office https://turbotax.intuit.com/tax-tips/small-business-taxes/setting-up-a-home-office/L52go3hc0

You can deduct the business percentage of the cell phone and internet

You can also deduct any reasonable and necessary expenses associated with making the income

[Haden Roye]

How can I tel penalties, etc.? It only shows estimated taxes so is it essentially a savings account with the IRS and once EOY taxes are calculated I will pay more or get money back? I feel like its no very prescriptive in terms of what to pay

[John-H2021]

When you file next year the estimated payments will be a credit to your account (like the tax withholding on a w-2) and you will either get a refund or have a balance due based on everything on your return.

One way to figure your estimates is every quarter take your gross income for that quarter minus any expenses for that quarter and then figure out the percentage of the net profit to send in for estimates.

The percentage will be your tax rate plus 15.3% for self employment tax, so if you were in the 10% tax bracket you would send in about 25% of you net profit for that quarter.

[Haden Roye]

So if I have this based off of yearly projections, I should divide this by 4 and pay that each quarter? Does this figure include the self-employment tax baked into the projected amount owed? I have currently been just adding 30% of income into a separate account so can just start applying that to the IRS on the due date. 

[John-H2021]

Without seeing your whole tax picture it's hard to tell if the SE tax is included, using the 30% would be 15% income tax and 15% SE tax, so if you in the 15% tax bracket 30% is correct.

You would divide by 4 and send it in each quarter but the first 2 quarters already passed so you should send the first 3 quarters asap but no later then 9/16 and the last payment is due 1/15/25

[Haden Roye]

Thanks for the responses. I will say I had no LLC income from Feb-March and had first LLC income April 2024. That being said I only need to divide the 26K by 2 quarters and make that payment, correct. Not counting Q1 since I had no income then, correct?

[Haden Roye]

Or more so divide that by 3 since I will only have that income across 3 quarters - in a result paying 17K for the Q3 payment and the remaining 8.3k for the 4th? Also how do they reference the amount you paid to avoid penalties if the projection is coming from a calculator?

[John-H2021]

Correct you will divide by 2 and make the 3rd and 4th quarter payments

Quarter 1 was due 4/15

Quarter 2 due 6/15

Quarter 3 due 9/15

Quarter 4 due 1/15/25