Quarterly Estimated Taxes Who makes the payment: you or your business?

A partnership or S corporation usually doesn't pay

A partnership return shows each owner's share of the profit. In most cases, the partnership doesn't make federal estimated income tax payments. An S corporation works much the same way. After it pays wages, the rest of the profit passes through to the owners' personal returns.

So the estimated payments are yours, and they go in on your personal return. Two owners means two separate sets of payments, even with one set of books. We set up each owner's payments separately, because each owner has their own last-year total tax, their own share of the profit and their own withholding if they get wages.

When the company does pay

A C corporation pays its own estimated tax. A calendar-year corporation's payments are due April 15, June 15, September 15 and December 15. The owner's personal payments end on January 15 instead.

Owners sometimes think the company's payment covered them too. It only covered the corporation's own tax. Your wages and any dividends still go on your personal return. If you're not sure which return you're looking at, we start with the form number at the top: 1065, 1120-S or 1120.

Wages are a separate question. We help decide how much tax your wages should have taken out. We help set payroll up, and your payroll company runs each payday. Tax taken out of your wages counts toward your personal estimated tax, while the company's own return covers only the company.

What we ask first

We ask who files the return, and whether that's a person or a corporation. Then we ask for last year's total tax on that return. Your business financials help later, if we use this year's numbers. First we sort out whose name goes on the payment.

If an IRS notice came in the company's name and you paid it from a personal account, bring both. We'll check the notice and the return together to see which due date it's about and whose payment it was.

Questions owners ask about the company

My S corporation already filed. Do I still make personal estimated payments? Usually, yes. The company's return reported your share of the profit. Your estimated payments still go in under your name, unless your wage withholding already covers the safe harbor.

What if there are two owners? Then there are two sets of payments. We work out each one from that owner's last-year total tax, share of the profit and wage withholding.

Does my LLC make estimated payments? It depends on how the LLC is taxed. A one-owner LLC is usually taxed on the owner's personal return, so you make the payments. An LLC taxed as a partnership or S corporation works like those. One taxed as a C corporation pays its own.

Does my company's payroll tax deposit count as my estimated tax? Only the income tax withheld from your own paycheck counts toward your estimate. The company's share of payroll taxes doesn't count.

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