Do SMLLC's (Single Member LLC's) pay quarterly estimated taxes through form 720?

[Mattneedshelp]

I set up a Single Member LLC in the State of NH at the beginning of 2018. I have no employees and did not change my election classification. 

Do I need to pay my estimated quarterly taxes through form 720?

[VolvoGirl]

If you are not a S corp and you file schedule C in your personal return for it then you just use 1040ES estimates.  Is there anything on the 720 you need to pay?  Excise tax is like sales tax you collect.  
<a rel="nofollow" target="_blank" href="https://www.irs.gov/pub/irs-pdf/f720.pdf">https://www.irs.gov/pub/irs-pdf/f720.pdf</a>

Here is the 1040ES
<a rel="nofollow" target="_blank" href="https://www.irs.gov/pub/irs-pdf/f1040es.pdf">https://www.irs.gov/pub/irs-pdf/f1040es.pdf</a>

[Mattneedshelp]

Do I pay that through the EFTPS system using my IRS issued EIN?

I don't think excise tax would apply to my business, I am a contractor, I do not sell any products.

[VolvoGirl]

Yes you can pay it electronically or by mailing in the 1040ES voucher with a check.

You can use the EFTPS (Electronic Federal Tax Payment System). You have to establish an account, get a PIN in the mail, submit your bank electronic transfer info, etc. Then from that website, you can log in and make any tax payments--estimates, or your Form 1040 amount due. It will let you schedule several payments ahead--up to a year's worth, I think, for individuals. 

OR You can pay them at https://www.irs.gov/Payments  

[VolvoGirl]

The first year you don't need to pay estimates as long as you pay in (by withholding) as much as your tax was last year.  But if you will have a big income you should send in estimates so you don't owe too much next April on your tax return.

For SE self employment tax - if you have a net profit (after expenses) of $400 or more you will pay 15.3% SE Tax on 92.35% of your net profit in addition to your regular income tax on it. So if you have other income like W2 income your extra business income might put you into a higher tax bracket.

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).

To prepare estimates for next year you start with your current return, but be careful not to change anything.  If you can't get back into your return, Try this, you can sign back onto your account, click the Visit My Tax Timeline and then under SOME THINGS YOU CAN DO, click on Add a State.  This should get you back into your return.

You can just type W4 in the search box at the top of your return , click on Find. Then Click on Jump To and it will take you to the estimated tax payments section. Say no to changing your W-4 and the next screen will start the estimated taxes section.

Or Go to….
Federal on Left or Personal (H&B Desktop version)
Other Tax Situations
Other Tax Forms
Form W-4 and Estimated Taxes - Click the Start or Update button

[VolvoGirl]

Do you need more info on filing self employment?

Some general info.  You will need to keep good records.  You may get a 1099Misc or 1099K at the end of the year if someone pays you more than $600 but you need to report all your income no matter how small.  You might want to use Quicken or QuickBooks to keep tract of your income and expenses.  There is one called QBSE QuickBooks Self Employed that works with Turbo Tax and will give you a free online tax return next year.

QuickBooks Self Employment bundle you can check out which includes one Turbo Tax Online Self Employed  return  <a rel="nofollow" target="_blank" href="http://quickbooks.intuit.com/self-employed">http://quickbooks.intuit.com/self-employed</a>    

To report your self employment income you will fill out schedule C in your personal 1040 tax return and pay SE self employment Tax. You will need to use the Online Self Employed version or any Desktop program but the Desktop Home & Business version will have the most help.

Self Employment tax (Scheduled SE) is automatically generated if a person has $400 or more of net profit from self-employment.  You pay 15.3% SE tax on 92.35% of your Net Profit greater than $400.  The 15.3% self employed SE Tax is to pay both the employer part and employee part of Social Security and Medicare.  So you get social security credit for it when you retire.  You do get to take off the 50% ER portion of the SE tax as an adjustment on line 27 of the 1040.  The SE tax is already included in your tax due or reduced your refund.  It is on the 1040 line 57.  The SE tax is in addition to your regular income tax on the net profit.

Here is some IRS reading material……

IRS information on Self Employment
<a rel="nofollow" target="_blank" href="http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Self-Employed-Individuals-Tax-Center"...

Pulication 334, Tax Guide for Small Business
<a rel="nofollow" target="_blank" href="http://www.irs.gov/pub/irs-pdf/p334.pdf">http://www.irs.gov/pub/irs-pdf/p334.pdf</a>  

Publication 535 Business Expenses
<a rel="nofollow" target="_blank" href="http://www.irs.gov/pub/irs-pdf/p535.pdf">http://www.irs.gov/pub/irs-pdf/p535.pdf</a>

[Mattneedshelp]

Thank you for the information. That was very helpful and straight forward. Internet searches have lent me conflicting answers on this so I appreciate your help. Are the quarterlies, required or mandatory, and are there any fee's or penalties associated with not paying them? I have been using QB self employed with the TurboTax Plugin since day 1 and have set aside in a separate business bank account the estimated minimum tax payment, but did not submit for Q1. Are the quarterlies required or is it just a "best practice" type of thing where It helps you not have a large bill to pay come April?

[VolvoGirl]

They are optional to pay but if you don't pay in anything and end up owing a big tax due on your tax return you may pay a penalty for not paying in during the year.

[KT7600]

I have to say a big thank you, I am in the same situation as the person above and was really confused about this form 720, looked online and it just got very confusing. No I have solid information.

I am just partly concerned because I missed the filing date of January 31, but I really had nothing to report as i was still in the middle of setting things up.

KT7600