Hi Abe! I recently tried making a quarterly tax payment and was informed that I needed to make my payment as a personal tax payment instead of a business payment. Is this true even if I am operating under an LLC?
Abe: That is correct! Even if you are operating under a single-member Limited Liability Company (LLC), your quarterly estimated tax payments are still recognized as a personal tax payment. The taxes you are paying are covering your personal income tax, as well as your Medicare and Social Security taxes, which are all attached to your Social Security Number.
One of the benefits of a single-member LLC is that it is a disregarded tax entity, therefore, LLCs are not required to file a business tax return or pay business taxes. This, along with the separation of personal and business assets, are often why independent contractors will begin their self-employment under an LLC.
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