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Lev, Tax Advisor
Category: Tax
Satisfied Customers: 28081
Experience:  Taxes, Immigration, Labor Relations
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My wife has been classified as an LLCs sole-proprietor self-employee

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My wife has been classified as an "LLC's sole-proprietor" self-employee when she received the EIN number for her new venture. She didn't work neither on 2006 nor 2007 and we filed a joint tax return for last year. She has been told to file form 1040-ES however it says "Exception: You do not have to pay estimated tax for 2008 if you [...] had no tax liability for the full 12-month 2007 tax year. You had no tax liability [...] if your total tax was zero or you did not have to file an income tax return". So we are confused here -we/she in fact filed a "married filing jointly" income tax return for 2007 but she had no tax liabilities, only myself as a 2007 employee. So the question is : #1 Does she needs to estimate her taxes for 2008 and timely file form 1040-ES? #2- If so, which "adjusted gross income" amount should we use: mine for 2007 or just a pure estimated of her gross income figure as there is no history to look at?

If you file joint tax return and you have a refund or even you owe taxes, but the amount you owe is less than $1000 - you do not need to file the form 1040-ES during the year and do not required to pay estimate taxes.


As you file jointly - adjusted gross income from joint tax return should be used.

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Customer: replied 7 years ago.
Thanks for your prompt reply. We in fact received a refund from IRS so as per you answer I understand she doesn't need to estimate taxes this year.

Yes - that is correct - you are not required to pay estimated taxes.

If you do so - you would be receiving larger refund...


But if the business will grow - you need to estimate your future tax liability based on net business income - self-employment taxes 15.3% plus income taxes based on your marginal tax rate (normally 15% or 25%). If additional tax liability will be more than your normal refund - you may need to pay estimated taxes.

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