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ZenBusiness suggested that I elect for my LLC to be taxed as an S-corp, but I see online that it requires me to "withhold" taxes on the salary I pay myself. This is a little confusing since the business is just me. How do I pay these "withheld" taxes to the government? I know how to make estimated tax payments as an individual, but I don't see much information on how to do so as an "employer" paying myself. Is it just a different website, or does a certain form have to be filed every time?

Or is there no difference in this case? What would differentiate "withheld" taxes from estimated tax payments?

Thanks

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It is a form that needs to be filed. You need to read about forms 940, 941, W2, and W3. There may be additional state and local filing and withholding requirements.

Or pay a small fee to a payroll processor to do this for you (and help you comply with other mandatory requirements).


After reading your other questions (here, here), I have better context now and see that you don't really understand what you're doing (no offense, you're not the first and not the last).

So a couple of clarifications:

It's not you paying yourself the salary, it's your LLC, which is a completely separate legal entity. You've elected it to also be treated as a completely separate entity for tax purposes (you didn't have to, but you explicitly told the IRS that you wanted to). As the result, you need to completely separate the concept of number41 the person and Number41 LLC the company - they're not at all the same.

With that in mind... The company has to withhold taxes from the salary it pays to the employee, and remit the taxes on behalf of that employee to the IRS (and State). It is the company's legal obligation, not yours.

Forms 940 and 941 are used to report how much money was withheld and remitted. These are usually filed quarterly (with some exceptions).

Forms W2 and W3 are used to report how much each employee earned, how these earnings are categorized, and how much money was remitted on their behalf to the IRS and the State. These forms are usually filed annually. A copy of form W2 is then being furnished to each of the employees.

Or is there no difference in this case? What would differentiate "withheld" taxes from estimated tax payments?

Withholding is the obligation of the employer, Number41 LLC. Estimated tax payments are the obligation of the emploee, M. Number41. The obligation to pay estimates may be satisfied through salary withholding made by your employer on your behalf, but not the other way around.

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  • Any example of a payroll processor who wouldn't be cost prohibitive for a single person? Any details about how the mentioned forms answer the question?
    – number41
    Commented Dec 27, 2022 at 5:54
  • @number41 ask any local tax accountant, or look for big names like ADP and such. Should cost around $30-$50/mo for a single employee company. Not sure what exactly is unclear in the answer, but feel free to ask for clarifications.
    – littleadv
    Commented Dec 27, 2022 at 6:05

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