Taxes as an LLC

[anniebreeze9]

Hi! I started a small business in May 2023 in Nashville, TN. Last year I really messed up my estimated tax for self-employment and owed thousands more than anticipated. How can I find out exactly what I need to pay come tax season in 2024? I am about to file to become an LLC as well. Any tips would be greatly appreciated as the resources are very confusing. Also, sales tax information would be extremely helpful. I've been collecting sales tax on my items. Thank you!

[sccas]

Hello and yes starting a new business in a huge endeavor and it comes with more responsibility.   As you mention becoming an LLC would not have any huge financial impact if you are single-member.  The election of becoming an LLC is normally at the state level.  For federal purposes, you will need to figure out which classification best suits your business

https://www.irs.gov/businesses/small-businesses-self-employed/limited-liability-company-llc

With regards to sales tax, this can be very complex if you sell across different states.  If you only sell in TN, it may be a little less complex but I would definitely check out  https://www.tn.gov/revenue/taxes/sales-and-use-tax.html

I always recommend using a software that suits your needs as doing this the old fashion way (pen and paper) never yields the most favorable outcome.