As a partner in a 50/50 partnership, do I enroll in EFTPS as an Individual or a Business?

[theleeb]

Hello, as a 50/50 partner in an LLC partnership, I am not sure whether to enroll in EFTPS as an individual or a business or both?

Since the partnership is a pass-through entity, we each will need to pay our own FICA / Medicare taxes as well as our Federal income taxes on our individual tax returns. 

I am guessing one of us could pay the quarterly estimated FICA / Medicare taxes on behalf of the business so that one of us would enroll in EFTPS as a business? 

Then, to pay our estimated quarterly Federal income taxes, we would each enroll as an individual?

Just guessing here and I don't want to overcomplicate!

Thanks.

[DaveF1006 · Accepted solution]

Yes, apply for the EFTPS as a business to pay the FICA/Medicare taxes for both of you. You will then report the share of the FICA/Medicare taxes on each of your W2's that was paid out by the partnership.

I am not sure what you mean by one of the partners paying. This should be paid from the income generated by the partnership so in a sense the partnership is paying the FICA taxes for both of you.. Let me know if you have a different interpretation. 

Now if you have estimated income tax payments that are generated by not having enough income tax withheld on each W2, each of you may apply to EFTPS as individuals to make quarterly income tax payments on that income.

[theleeb]

Thank you for your response.  So that makes sense.  The business will be enrolled in EFTPS as a business (not individual) and either me or my partner will access the EFTPS business account to make the payment each quarter...at least that is how I understand your explanation.

We do not have employees so I believe we would report the payments on form K-1 to each of the two partners rather than a W-2.

Since we each will also pay Federal income taxes, we must make estimated quarterly payments as well.  That is where I am guessing (and I believe you are confirming) that we would each need to enroll in ETFPS as individuals to make the payment.  

As you can imagine for any business, the net profits are likely to differ for each quarter (ok, not necessarily a calendar quarter according to the IRS schedule...and all the more reason why the net profits will differ per IRS "quarter").  Is it ok to calculate the net profit at the end of each quarter and make the 15.3% payment accordingly? (e.g., instead of equal amounts).

[AliciaP1]

If you do not pay yourselves a salary or wage from the partnership you will not use EFTPS to make any payments.  The business is not entitled to pay the FICA taxes on your behalf.

A partnership is a pass-through entity and all tax on the income is the responsibility of each partner on an individual level.  You will each make estimated tax payments through the year personally, and when you complete your personal returns after receiving the Schedule K-1s from the partnership return, you will have self-employment tax (which is self-employed FICA) reported and the taxes you paid or will pay in will be classified appropriately.

@theleeb