Do single-member LLC owners need to pay estimated taxes?

Yes, you do. A single-member LLC is a disregarded entity for federal tax purposes by default, so the IRS treats you as a sole proprietor. That means you're responsible for estimated taxess on your net income if you expect to owe $1,000 or more when you file. The LLC itsvelf doesn't pay federal income tax.

I found this out the hard way my first year too. Ended up with an underpayment penalty. It wasn't huge, but it was annoying. Now I just make quarterly payments based on what I expect to earn.

One thing to add: the $1,000 threshold is for the total tax liability shown on your return, not just self-employment tax. If your withholding from a W-2 job covers most of it, you might be fine. But since you're the only owner and likely have no withholding, you probably need to pay.

Thanks. I don't have any other job, so I guess I need to start. Is there a penalty for missing the first couple of quarters? I might be able to catch up.

You can catch up by increasing your remaining payments or having more withheld, but the underpayment penalty is calculated per quarter. The IRS uses Form 2210 to figure it outt. It's based on how much you underpaid each period.

Not a tax pro, but but I've been in this spot. The penalty is basically interest on the late amount. If you missed the first two quarters, you can still make a payment now and adjust the last two. It's better than waiting until April.

Also check your state. Some states require estimated payments separately, and the thresholds can be different.

Right. And if you expect to owe less than $1,000 total for the year, you're generally off the hook for federal penalties. But if you're profitable, that's unlikely.

I think I'll be over $1,000. So I should use the safe harbor? I've heard about paying 100% of last year's tax or 90% of this year's.

Yes, the safe harbors are 100% of prior year's tax (110% if your AGI was over $150k) or 90% of current year's tax. Since this is your first year with the LLC, you might not have a prior year tax to base it on, so 90% of current year is the practical route.

If you didn't have any tax liability last year, you might qualify for an exception. But once you start owing, you need to pay in.

Just set a reminder for the quarterly dates. I use a calendar alert. Paying online is easy through IRS Direct Pay.

also, don't forget self-employment tax. That's 15.3% on your net earnings, and it's part of what you're paying estimates on. A lot of new LLC owners miss that.

I appreciate all this. I'll make a payment this weke and adjust the rest. Better late than never, I guess.