Self Employment

[Lexluethar]

Hehe ya, are there advantages to filing / paying taxes quarterly? I just saw it as extra overhead at this point.

Can an LLC pay quarterly? Thought that may only pertain to Corporations.

 

[Nagasama]

the only real advantage of paying quarterly (in my case) is so we dont have a tremendous revenue blow at the beginning of the year (notoriously slow time for construction). i would say that you are right, yes...the overhead required would not be worth it until you got up to about 1-2 million gross. a real accountant may disagree with that.
well, we can pay quarterly, but i tend to do like you do and save the money and draw interest instead of giving it to the gub'ment for free. im not sure about the LLC/corporations. hefe is an accountant i think, he could answer your questions loads better than me.
really i just wanted to chime in because i have known several business owners that get into tax trouble by not saving for/paying their taxes. if you are socking away that much of your gross you should be fine.

 

[Lexluethar]

Haha ya the company is still in the red so i'm not too worried at this point - but yes I do realize that I have to stash almost half of my earnings in anticipation of paying taxes.

 

[Hefemeister]

Once you owe more than $1,000 at tax time the government will make you do estimated quarterly payments. They also stick you with an underpayment penalty when you owe more than 1k. Too bad taxpayers can stick the government with a penalty if they are owed more than 1k in a refund.

My goal every year was to owe around an additional $800. This way I had no penalties and could make a little money in a cd account until it was owed to the government. I would always laugh at the people who wanted to withhold a bunch of money so they would have a large refund. I would always tell them how about giving me $100 a month for a year and I will give you $1,200 in April the following year. They would always say no way. Then I would follow up with "so why would you do the same with the irs?"

Back on subject Lex if your company is not going to make money no need for estimated payments. In fact you can wait a bit until you know you are going to make money and start your payments later in the year.

 

[Nagasama]

I would always laugh at the people who wanted to withhold a bunch of money so they would have a large refund. I would always tell them how about giving me $100 a month for a year and I will give you $1,200 in April the following year. They would always say no way. Then I would follow up with "so why would you do the same with the irs?

exactly. why lend the government your money for free?