Question

LLC partnership: do we pay quarterly on net PROFIT or total EARNINGS?

Forum|Forum|2 years ago
August 30, 2023
1 reply
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Q1: how much money do we set aside quarterly, to pay business taxes owed from the LLC- 15.3%?

Q2: Of the gross earnings, are we only responsible for paying business taxes on the net profit?

Q3: Is there a minimum amount of net profit that has to be earned quarterly to require us to pay quarterly tax?

Ask the Experts - Self-Employed - Aug 2023

Quarterly estimated taxes are paid in to the IRS throughout the year to cover the tax on your self-employment income. Here's a link to the Form 1040-ES, which has a worksheet for calculating how much tax to pay.

https://www.irs.gov/pub/irs-pdf/f1040es.pdf

The amount of income you use in the calculation for the self employment income is the actual profit, not the total earnings. Your goal is to make sure that you do not end up owing $1,000 or more at the end of the year when you file your tax return. There are some additional stipulations with estimated tax penalties that you can find here:

https://www.irs.gov/pub/irs-pdf/i2210.pdf

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B

Burkec85Author

If I pay myself a disbursement from my net profits, is the taxable amount then the net profit minus my disbursement? Then I would owe personal income tax on the amount I paid myself from the LLC, is that correct?