Hello,I just formed a one-person LLC in DE a few weeks ago. I used to be under the impression that I would have to pay estimated tax payments no matter what, but after looking at the 1040-ES form, I'm not so sure. It says:In most cases, you must make estimated tax payments if you expect to owe at least $1000 in tax for 2005 (after subtracting your withholding and credits) and you expect your withholding and credits to be less than the smaller of 1) 90% of the tax shown on your 2005 return or 2) 110% of the tax shown on your 2004 return.OK, so that is saying that I should make estimated payments if I expect to owe at least $1000 in taxes between my regular W4 wages and my business income, after all payments and credits have been applied, right? We got a refund of $4000 or so last year, and our picture isn't changing at all. I forsee having maybe two or three more customers before year's end, with a total profit of maybe $1500 tops. So there's basically no way that I would ever end up owing $1000 in tax, right? Am I missing anything?Thanks!- Ken
You'r right, Ken. On the assumptionthat you got a refund because your normal withholding is more than your last year's tax, and your withholding is continuing at the same rate as last year, you are meeting a safe harbor if your AGI last year was less than $150,000. You do not have to pay estimates. ed
Best Of |
Favorites & Replies |
Start a New Board |
My Fool |
BATS data provided in real-time. NYSE, NASDAQ and NYSEMKT data delayed 15 minutes.
Real-Time prices provided by BATS. Market data provided by Interactive Data.
Company fundamental data provided by Morningstar<