How can I figure our federal and state estimated taxes?

Question

We are a partnership LLC company and I think its time to start getting ready to pay estimated taxes. This is our first year not having any regular jobs on the side so we WILL have to pay taxes. I have no idea what to do :)

Answer 1

The easiest way is to pay 1/4 of tax on your previous years tax return as quarterly payment.

Read this:

http://taxipay.blogspot.com/2008/04/tax-...

Answer 2

The partnership will not have to pay estimated taxes, but you as individuals that are members of the LLC will have to pay taxes on your share of the earnings.  The easiest way to estimate what you would owe for the second quarter estimates, which are due June 16th this year, is to annualize the year to date income and take that times your ownership percentage (assuming all is ordinary income and minimal rentals or investment income is involved.)  For example, take the May 31st net income on your income statement and multiply it by 6/5 to come up with a six month income number.  Take this multiplied by your ownership percentage.  At this point, you will need to go to the IRS website (irs.gov) and look up the individual (or married as the case may be) tax rates for 2008 to estimate what your liability is.  While you are their, you can print out a voucher to send with your check.

Hope this helps.