Quarterly Taxes Question?

Question

This is my first quarter operating on my own. I am set up as an LLC and am unsure of which forms I need to fill out. Do I fill out 1040 because I am the only member of the LLC or do I use form 941? What forms should I use for state and local? I am in Richmond, VA.

Answer 1

If the LLC has only one owner, (see Publication 555, on community property states), it will automatically be treated as if it were a sole proprietorship (a disregarded entity), unless an election is made for it to be treated as a corporation.  The IRS is not telling you what they mean by a "disregarded entity".   However, I have concluded from enrolled agent seminars I have attended that the IRS is telling you to file as a sole proprietorship unless you change your entity classification.  You have to fill out and submit an 8832 in order to do that.

You make bank deposits in the business account you set up.  Your first Form 941 is due on July 31.  You must deposit your self-employment tax [social security, medicare} every month or use the voucher on the 941 and submit every quarter.  Sometimes, the IRS will send you a notice stating you need to submit every month.  That goes against the floor they have established, but I HAVE SEEN IRS NOTICES STATING YOU MUST DEPOSIT EVERY MONTH EVEN WHEN THE PAYROLL IS BELOW 2500 FOR THE QUARTER.

Cannot tell from your question whether you just moved to Virginia.  Thus, I attached a VA-4B, just in case.  You send in estimated taxes on VA Form 760-ES.  Online, Virginia hasn't come out with the 2008 estimated tax voucher yet.  In your situation, estimated taxes are due June 15, 2007, September 15, 2007, January 15, 2009 and May 1, 2009.  Virginia income taxes are due May 1, by the way.   You may want to call Francis Forehand at 440-2550 or 786-2899.  You are blessed to be in Richmond.  Virginia has no toll-free number for taxpayers.

Answer 2

Form 941 is for your payroll taxes.  If you have employees you will be filing that.  If you don't have any employees then there's no need to file Form 941.  (If you elected to be taxed as a Corporation you do have at least one employee -- yourself!)

You file estimated tax payments using Form 1040-ES.  Form 1040 is your tax return itself; you file that next year as usual.