Frequently Asked Questions Regarding LLC Taxes
Navigating Taxes: A Challenge for Small Business Owners and Executives2 min read
Whether you are a small business owner seeking to form an LLC or an executive looking for legal support from corporate business lawyers, navigating the complex state and federal laws and regulations governing taxes can be a challenging process. This article will answer the most frequently asked questions about LLC taxes and provide in-depth information on LLC tax liabilities to help guide you on your business or legal journey.
When it comes to LLC taxes in the state of New York, there are several important points to understand. First, LLCs are pass-through entities, which means that any profits (or losses) made by the LLC are passed through the company to the LLC members. Second, taxes are not withheld from LLC member paychecks, so LLC members are responsible for paying quarterly estimated taxes. Finally, LLCs can be subject to other fees or taxes, such as business corporate income taxes, self-employment taxes, and franchise taxes depending on your particular business.
Understanding the structure of an LLC and how it is taxed can help you make the smartest choices for the success of your business or legal venture. To help you with this process, we’ve compiled 3 frequently asked questions about LLC taxes and provided the answers to them below.
What tax liabilities do LLCs have in the State of New York?
In the state of New York, LLC dues are $50 and there is an additional fee of reporting, to be paid each year, of $9. The LLC must also file personal income taxes, as well as other fees associated with the LLC’s operations, such as sales tax and payroll taxes. For LLCs that make over $4 million in gross income, the LLC must remit a franchise tax to New York. Additionally, LLCs are subject to pay self-employment taxes and business corporate income taxes, however the tax liability depends on the number of LLC members.
Do LLCs need to pay quarterly estimated taxes?
Yes, LLCs must pay quarterly estimated taxes in order for the government to keep track of the income and expenses of the business. It is important to pay the estimated taxes or the LLC can be subjected to late payment penalties. The estimated taxes are due on the 15th day of the fourth, sixth, ninth, and twelfth months of the tax year.
Who pays taxes on LLC profits and losses?
LLCs are pass-through entities, which means that the LLC’s profits and losses are “passed-through” to individual LLC members, who are then responsible for paying taxes on the LLC’s income. The LLC member will then report the income on their own personal tax return and pay taxes on the income.
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