LLC Quarterly Taxes: What You Owe and When

When you have a W-2 job, your employer withholds taxes from every paycheck. As an LLC owner, nobody does that for you. Instead, you are expected to pay estimated taxes quarterly to the IRS — and potentially to your state. Miss a payment, and you will face penalties even if you file on time.

Who Needs to Pay Quarterly

You must pay quarterly estimated taxes if you expect to owe $1,000 or more in federal taxes for the year (after subtracting withholding and credits). For most LLC owners earning more than a few thousand dollars in profit, this applies.

The Four Deadlines

• Q1: April 15 (covers January 1 – March 31)
• Q2: June 15 (covers April 1 – May 31)
• Q3: September 15 (covers June 1 – August 31)
• Q4: January 15 of the following year (covers September 1 – December 31)

Note that the periods are not evenly divided. Q2 covers only two months, while Q3 covers three.

How to Calculate Your Payments

The simplest approach is the safe harbor method: pay 100% of last year's total tax liability divided by four. If your adjusted gross income was over $150,000 last year, you must pay 110% of last year's tax divided by four.

Alternatively, you can estimate each quarter based on actual income earned. This is more accurate but requires more calculation.

Use IRS Form 1040-ES for the worksheet and payment vouchers.

How to Pay

• IRS Direct Pay (directpay.irs.gov) — free, pay from your bank account
• EFTPS (Electronic Federal Tax Payment System) — free, requires enrollment
• Credit/debit card — processing fee applies
• Mail a check with Form 1040-ES voucher

What Happens If You Don't Pay

The IRS charges an underpayment penalty if you owe more than $1,000 at filing time and did not pay sufficient estimated taxes. The penalty rate fluctuates with interest rates but has been approximately 8% annually in recent years. The penalty applies from the date each quarterly payment was due until the date you actually pay.

Don't Forget State Quarterly Taxes

Most states with an income tax also require quarterly estimated payments. Check your state's tax agency website for deadlines — they usually match the federal dates but not always.

Have questions about your specific tax situation? Ask Sedes for general guidance on LLC tax obligations.