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1:47 pm
April 3, 2013
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Club Thrifty
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OK dudes and dudettes,
So we are new to this whole side gig thing. We have created an LLC for our blog and are taxed as a partnership. We also have full-time jobs. We are in line to make a substantial amount of money this year. Should we try and change our exemptions/withholdings at our full-time job in order to cover our quarterly taxes, or should we simply pay our own estimated quarterly taxes for the income above and beyond the income we earn at work? Any advice (especially from you tax pros) would be great! Thanks!
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12:34 am
April 4, 2013
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The College Investor
| | San Diego, CA | |
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As long as your withholding for this year (2013) exceeds your tax bill from last year, you don't need to worry about any special payments! Never give the government extra money. Yes, you will owe at tax time.
If you can't stand to owe, or you aren't getting enough withheld at work to cover your tax bill, you could either:
1. Withhold more – make sure the total amount withheld exceeds your total tax due from 2012
2. Pay estimated taxes – If you're going to pay estimated taxes, you might as well try to be as accurate as possible with your tax liability
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7:15 am
April 4, 2013
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AverageJoe
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I agree with Robert, but will add that it's generally easier to withhold at work than to accumulate quarterly payments. I've been self employed my whole career while Cheryl has always worked for others. We withhold monster amounts from her checks to cover my liability.
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11:44 am
April 4, 2013
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Club Thrifty
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| Member | posts 251 |
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Cool. That is the way that I was originally leaning, but thought I'd ask some of you who have been doing this for a while. It seems like it would be much easier to just withhold through work, if possible. I'm sure that we will still owe, but that should cut down on it somewhat.
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12:02 pm
April 4, 2013
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Edward Antrobus
| | Fort Collins, CO | |
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I'm actually leaning towards making quarterly payments. I'm having a hard enough tinge to get my job to withhold enough to cover my tax lability from working for them!
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I'm looking for editors, beta-readers, and some demographic research for my upcoming novel, Once Upon a Saturn Moon. If you like reading soft sci-fi thrillers, maybe with a touch of romance thrown in, you can find more information at http://seampublishing.com/once…..aturn-moon
If You Can Read, You Can Cook – http://www.ifyoucanread.com | Think you can't cook? If you can read this sentence, then you can.
SEAM Publishing – http://www.seampublishing.com | eBook formatting and publishing service
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2:51 pm
April 4, 2013
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krantcents
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It can add to your withholding by deducting a flat amount or make quarter estimate payments. The IRS does not care one way or another as long as you as they get your taxes.
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4:13 pm
April 5, 2013
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Jake@iHeartBudgets.net
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The US tax system is a "pay as you go" tax system. Once the IRS finds out you are in business, they "prefer" you pay quarterly, but in the end, as long as you owe less than $1,000 at the end, they couldn't care less. However you get there (quarterly, paycheck, etc) is your prerogative.
All that being said, any reason you chose to be taxed as a partnership? There are more tax advantages to being taxed as an S-Corp, and honestly, if your income is under $40k, you could stick with Sole Prop. on a Schedule C and be fine (while still being shielded from liability with your LLC).
My blog income from last year was just thrown into my Shc C. business, no probs.
Full disclosure: I have not done a corporate return yet, just reviewed a few. I know the tax laws surrounding them, and am a tax professional, but don't have a TON of experience with corporations.
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5:18 pm
April 5, 2013
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Club Thrifty
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Post edited 5:20 pm – April 5, 2013 by Club Thrifty
Jake@iHeartBudgets.net said:
All that being said, any reason you chose to be taxed as a partnership? There are more tax advantages to being taxed as an S-Corp, and honestly, if your income is under $40k, you could stick with Sole Prop. on a Schedule C and be fine (while still being shielded from liability with your LLC).
We chose a partnership because we are a multi-member LLC and thus could not do a Sole Prop. We elected not to go with S-Corp status due to A) more paperwork and B) we didn't want to have to mess with paying ourselves a wage/payroll taxes. Thoughts on that?
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6:18 pm
April 5, 2013
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Edward Antrobus
| | Fort Collins, CO | |
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How many is multi-member? I had a partnership in college and had to pay a $50 pet person filing fee for one if the tax documents. I don't remember which one now as it's been a decade.
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I'm looking for editors, beta-readers, and some demographic research for my upcoming novel, Once Upon a Saturn Moon. If you like reading soft sci-fi thrillers, maybe with a touch of romance thrown in, you can find more information at http://seampublishing.com/once…..aturn-moon
If You Can Read, You Can Cook – http://www.ifyoucanread.com | Think you can't cook? If you can read this sentence, then you can.
SEAM Publishing – http://www.seampublishing.com | eBook formatting and publishing service
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6:44 am
April 6, 2013
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Club Thrifty
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| Member | posts 251 |
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Edward Antrobus said:
How many is multi-member? I had a partnership in college and had to pay a $50 pet person filing fee for one if the tax documents. I don't remember which one now as it's been a decade.
Multi-member is just more than one. We chose that route as it is supposed to be better liability protection than a single member LLC. Hopefully, we will never have to find out.
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7:48 am
April 6, 2013
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Lance at Money Life and More
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I personally just send in estimated quarterly payments. I keep track of my business activity so it isn't difficult to figure out an estimate of how much I owe each quarter.
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9:45 am
April 6, 2013
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Edward Antrobus
| | Fort Collins, CO | |
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Club Thrifty said:
Multi-member is just more than one. We chose that route as it is supposed to be better liability protection than a single member LLC. Hopefully, we will never have to find out.
I meant how many is your multi-member partnership? I recall a 2 person partnership having no filing fee but three or more having that $50/person fee.
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I'm looking for editors, beta-readers, and some demographic research for my upcoming novel, Once Upon a Saturn Moon. If you like reading soft sci-fi thrillers, maybe with a touch of romance thrown in, you can find more information at http://seampublishing.com/once…..aturn-moon
If You Can Read, You Can Cook – http://www.ifyoucanread.com | Think you can't cook? If you can read this sentence, then you can.
SEAM Publishing – http://www.seampublishing.com | eBook formatting and publishing service
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8:09 am
April 7, 2013
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Club Thrifty
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| Member | posts 251 |
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Edward Antrobus said:
Club Thrifty said:
Multi-member is just more than one. We chose that route as it is supposed to be better liability protection than a single member LLC. Hopefully, we will never have to find out.
I meant how many is your multi-member partnership? I recall a 2 person partnership having no filing fee but three or more having that $50/person fee.
Ha! Sorry Edward. Ours is 2. Was that a state of federal fee?
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