TX LLC Taxes

Jan 13, 2007 2 Replies
S

I started my consulting business (single member LLC) on Oct-1-2006 and had total income fro Oct-Dec of 65K including around expenses. From Jan to Sept I was working fulltime for a company and earned around 120K with the taxes deducted regularly from my paycheck. I have already paid all SS tax on my income for 2006 (94K limit) via my previous employer. I want to know should I pay my estimated taxes for my business on Jan 15th or wait till April to file my income tax for 2006? Ho should I calculate the tax for estimated and federal income tax for the three months? I live in TX so we do not have any State Income Taxes.



Thanks in advance.



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T

You should have sufficent taxes paid in by Jan 15 to avoid any penalty for underpayments. Unless you had a lot more than enough withheld in your previous job, you need to pay most of the tax you will still owe on your 2006 income by Jan 15. If you have paid most of it by Jan 15 and only owe $100+/- more April 15, that would not result in a penalty. If you pay a few days after Jan 15, there would probably be no penalty. What I do, if I am underpaid, is to, first, pay what I think it will be Jan 15, then if I've underestimated, calculate the tax, pay all I owe plus a few dollars more in April, request an extension, then get a refund of the few dollars I overpaid when I file. This seems to trick the IRS computers into thinking I overpaid instead of underpaid.

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K

I trust you are aware that for returns due in 2008 (based on financial data for years ending in 2007), your single-member LLC will be subject to the new Texas "margin tax." Katie in San Diego

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