Single-member LLC required for quarterly filings?

[antd1125]

I am a single-Member LLC.  Last year, my Nonemployee Compensation on my 1099-NEC was ~$2500.  I did not submit quarterly filings last year, but instead submitted everything within my annual return.  Are quarterly payments required for a single-member LLC or can I continue submitting as part of my annual return please?  If I am required to submit quarterly payments, how do I go about doing it please?

 IRS says that "individuals, including sole proprietors, partners, and S corporation shareholders generally have to make estimate tax payments."  Since I am a single-member LLC, my assumption is I am not required to submit quarterly filings, correct?

[Loretta P]

Hello antd1125,

You don't mention if you have a W-2 job in addition to your Single Member LLC.  

The IRS requires that taxes are paid as you go instead of waiting to make a lump sum at the end of the year.  This article from the IRS.gov will help explain:  Pay As You Go, So You Won't Owe:  A Guide to Withholding, Estimated Taxes, and Ways to Avoid the Est...

You will need to calculate what your estimated tax will be for 2024.  This will be the amount you want to submit as estimated tax payments.  You would then submit your 3rd and 4th quarter estimated payments to cover this amount.  You can submit your estimated payments online at the IRS website or you can print the estimated voucher and mail it to the IRS with a check or money order.

If you did have a w-2 job or are filing a joint return with a spouse who has a w-2 job, you will need to calculate what your estimated tax will be for 2024 and the subtract what has been submitted so far as withholding.  The balance left after subtracting withholding would be the amount you want to submit as estimated tax payments.  You would then submit your 3rd and 4th quarter estimated payments to cover this amount.  You can submit your estimated payments online at the IRS website or you can print the estimated voucher and mail it to the IRS with a check or money order.

TurboTax's Tax Caster tax calculator is a good tool to help you estimate your 2024 tax bill or see if you may get a refund. 

Here are some helpful links with additional information on how and when to make estimated payments.

Estimated Taxes: How to Determine What to Pay and When 

When to pay estimated tax

[antd1125]

Thanks!  I do have a separate W2 job and have $100 additional withholdings taken out of my bi-weekly check throughout the year to account for something like this.  My wife is a W2 employee as well.  The single member LLC will most likely generate ~$5k in profit in 2024.

In this separate Intuit Turbo Tax article below (Primary income via W2 with some 1099 earnings as well) , it says you can increase your W4 additional withholdings to avoid estimated quarterly payments.  My assumption was I have already accounted for that by following this additional withholdings approach.  What do you recommend please?

[Loretta P]

It is perfectly ok to take additional withholding from a w-2 job to cover the expected increase in income from other sources that would usually require estimated tax payments.  By having the employer take additional withholding out of your check and submitting it for you, you would not have to file and pay any estimated payments.

You can use the TurboTax's Tax Caster tax calculator to help make sure the additional amount will be enough or if you should adjust the additional amount of withholding being taken out of your paycheck.  

[VolvoGirl]

You said….

IRS says that "individuals, including sole proprietors, partners, and S corporation shareholders generally have to make estimate tax payments."  Since I am a single-member LLC, my assumption is I am not required to submit quarterly filings, correct?

Not correct.   A Single Member LLC that is not an S corp is a disregarded entity and you file it in your personal tax return on Schedule C.   It is the same as Sole Proprietor, self employed, independent contractor, freelance, etc.   You file it as an individual.

You can increase your W2 withholding to cove the self employment tax or…..

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).