Quarterly taxes with W2 and K1 income

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Jcdoc107
Posts: 23
Joined: Sun Sep 20, 2015 10:29 am

Quarterly taxes with W2 and K1 income

Post by Jcdoc107 » Tue Jan 10, 2017 3:06 pm

I have not been able to find an answer to this question.

I have both W2 and K1 income. The majority is K1 income. Is it possible to not withhold anything from my W2 and pay quarterly taxes on both W2 and K1 income or am I required to withhold from my W2 and pay quarterly on my K1 income?

MindTheGAAP
Posts: 297
Joined: Fri Jan 31, 2014 12:44 am

Re: Quarterly taxes with W2 and K1 income

Post by MindTheGAAP » Tue Jan 10, 2017 3:11 pm

Jcdoc107 wrote:I have not been able to find an answer to this question.

I have both W2 and K1 income. The majority is K1 income. Is it possible to not withhold anything from my W2 and pay quarterly taxes on both W2 and K1 income or am I required to withhold from my W2 and pay quarterly on my K1 income?
Yes - as long as you make ES payments quarterly then you can avoid withholding - assuming your W-2 wages are <$80k/yr, you only have to file IRS Form 941 on a quarterly basis and you'd make any payments with that as appropriate... IN ADDITION to your ES payments.
"One of the funny things about the stock market is that every time one person buys, another sells, and both think they are astute" - William Feather

Topic Author
Jcdoc107
Posts: 23
Joined: Sun Sep 20, 2015 10:29 am

Re: Quarterly taxes with W2 and K1 income

Post by Jcdoc107 » Tue Jan 10, 2017 3:21 pm

MindTheGAAP wrote:
Jcdoc107 wrote:I have not been able to find an answer to this question.

I have both W2 and K1 income. The majority is K1 income. Is it possible to not withhold anything from my W2 and pay quarterly taxes on both W2 and K1 income or am I required to withhold from my W2 and pay quarterly on my K1 income?
Yes - as long as you make ES payments quarterly then you can avoid withholding - assuming your W-2 wages are <$80k/yr, you only have to file IRS Form 941 on a quarterly basis and you'd make any payments with that as appropriate... IN ADDITION to your ES payments.
My W2 income is >80k/yr. How does this change things?

SouthernCPA
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Re: Quarterly taxes with W2 and K1 income

Post by SouthernCPA » Tue Jan 10, 2017 3:28 pm

MindTheGAAP wrote:
Jcdoc107 wrote:I have not been able to find an answer to this question.

I have both W2 and K1 income. The majority is K1 income. Is it possible to not withhold anything from my W2 and pay quarterly taxes on both W2 and K1 income or am I required to withhold from my W2 and pay quarterly on my K1 income?
Yes - as long as you make ES payments quarterly then you can avoid withholding - assuming your W-2 wages are <$80k/yr, you only have to file IRS Form 941 on a quarterly basis and you'd make any payments with that as appropriate... IN ADDITION to your ES payments.
Why would OP have to file a 941? The entity will have to file a 941, but OP wouldn't file any additional 941.

Quark
Posts: 1045
Joined: Sun Nov 01, 2015 5:32 pm

Re: Quarterly taxes with W2 and K1 income

Post by Quark » Tue Jan 10, 2017 3:35 pm

MindTheGAAP wrote:
Jcdoc107 wrote:I have not been able to find an answer to this question.

I have both W2 and K1 income. The majority is K1 income. Is it possible to not withhold anything from my W2 and pay quarterly taxes on both W2 and K1 income or am I required to withhold from my W2 and pay quarterly on my K1 income?
Yes - as long as you make ES payments quarterly then you can avoid withholding - assuming your W-2 wages are <$80k/yr, you only have to file IRS Form 941 on a quarterly basis and you'd make any payments with that as appropriate... IN ADDITION to your ES payments.
Form 941 is only required if you have employees. https://www.irs.gov/uac/about-form-941

Just having W2 and K1 income wouldn't seem to require 941.

I believe that so long as you pay enough estimated taxes at the right times, you won't have a problem. Withholding can be better because there's no timing requirement.

MindTheGAAP
Posts: 297
Joined: Fri Jan 31, 2014 12:44 am

Re: Quarterly taxes with W2 and K1 income

Post by MindTheGAAP » Tue Jan 10, 2017 3:42 pm

Quark wrote:
MindTheGAAP wrote:
Jcdoc107 wrote:I have not been able to find an answer to this question.

I have both W2 and K1 income. The majority is K1 income. Is it possible to not withhold anything from my W2 and pay quarterly taxes on both W2 and K1 income or am I required to withhold from my W2 and pay quarterly on my K1 income?
Yes - as long as you make ES payments quarterly then you can avoid withholding - assuming your W-2 wages are <$80k/yr, you only have to file IRS Form 941 on a quarterly basis and you'd make any payments with that as appropriate... IN ADDITION to your ES payments.
Form 941 is only required if you have employees. https://www.irs.gov/uac/about-form-941

Just having W2 and K1 income wouldn't seem to require 941.

I believe that so long as you pay enough estimated taxes at the right times, you won't have a problem. Withholding can be better because there's no timing requirement.
If he has W2 wages then he has an employee - even if it is himself.
"One of the funny things about the stock market is that every time one person buys, another sells, and both think they are astute" - William Feather

MindTheGAAP
Posts: 297
Joined: Fri Jan 31, 2014 12:44 am

Re: Quarterly taxes with W2 and K1 income

Post by MindTheGAAP » Tue Jan 10, 2017 3:43 pm

SouthernCPA wrote:
MindTheGAAP wrote:
Jcdoc107 wrote:I have not been able to find an answer to this question.

I have both W2 and K1 income. The majority is K1 income. Is it possible to not withhold anything from my W2 and pay quarterly taxes on both W2 and K1 income or am I required to withhold from my W2 and pay quarterly on my K1 income?
Yes - as long as you make ES payments quarterly then you can avoid withholding - assuming your W-2 wages are <$80k/yr, you only have to file IRS Form 941 on a quarterly basis and you'd make any payments with that as appropriate... IN ADDITION to your ES payments.
Why would OP have to file a 941? The entity will have to file a 941, but OP wouldn't file any additional 941.
Agreed - I was operating under the assumption - maybe incorrectly - that he was a single-member LLC/S-Corp.
"One of the funny things about the stock market is that every time one person buys, another sells, and both think they are astute" - William Feather

Quark
Posts: 1045
Joined: Sun Nov 01, 2015 5:32 pm

Re: Quarterly taxes with W2 and K1 income

Post by Quark » Tue Jan 10, 2017 3:54 pm

MindTheGAAP wrote:
Quark wrote:
MindTheGAAP wrote:
Jcdoc107 wrote:I have not been able to find an answer to this question.

I have both W2 and K1 income. The majority is K1 income. Is it possible to not withhold anything from my W2 and pay quarterly taxes on both W2 and K1 income or am I required to withhold from my W2 and pay quarterly on my K1 income?
Yes - as long as you make ES payments quarterly then you can avoid withholding - assuming your W-2 wages are <$80k/yr, you only have to file IRS Form 941 on a quarterly basis and you'd make any payments with that as appropriate... IN ADDITION to your ES payments.
Form 941 is only required if you have employees. https://www.irs.gov/uac/about-form-941

Just having W2 and K1 income wouldn't seem to require 941.

I believe that so long as you pay enough estimated taxes at the right times, you won't have a problem. Withholding can be better because there's no timing requirement.
If he has W2 wages then he has an employee - even if it is himself.
A W2 means he is an employee receiving wages, not that he is an employer. A K1 doesn't make him an employer either. For example, he could be a limited partner. Even an active general partner wouldn't have to file a 941 personally.

MindTheGAAP
Posts: 297
Joined: Fri Jan 31, 2014 12:44 am

Re: Quarterly taxes with W2 and K1 income

Post by MindTheGAAP » Tue Jan 10, 2017 3:57 pm

Quark wrote:
MindTheGAAP wrote:
Quark wrote:
MindTheGAAP wrote:
Jcdoc107 wrote:I have not been able to find an answer to this question.

I have both W2 and K1 income. The majority is K1 income. Is it possible to not withhold anything from my W2 and pay quarterly taxes on both W2 and K1 income or am I required to withhold from my W2 and pay quarterly on my K1 income?
Yes - as long as you make ES payments quarterly then you can avoid withholding - assuming your W-2 wages are <$80k/yr, you only have to file IRS Form 941 on a quarterly basis and you'd make any payments with that as appropriate... IN ADDITION to your ES payments.
Form 941 is only required if you have employees. https://www.irs.gov/uac/about-form-941

Just having W2 and K1 income wouldn't seem to require 941.

I believe that so long as you pay enough estimated taxes at the right times, you won't have a problem. Withholding can be better because there's no timing requirement.
If he has W2 wages then he has an employee - even if it is himself.
A W2 means he is an employee receiving wages, not that he is an employer. A K1 doesn't make him an employer either. For example, he could be a limited partner. Even an active general partner wouldn't have to file a 941 personally.
MindTheGAAP wrote:
SouthernCPA wrote:
MindTheGAAP wrote:
Jcdoc107 wrote:I have not been able to find an answer to this question.

I have both W2 and K1 income. The majority is K1 income. Is it possible to not withhold anything from my W2 and pay quarterly taxes on both W2 and K1 income or am I required to withhold from my W2 and pay quarterly on my K1 income?
Yes - as long as you make ES payments quarterly then you can avoid withholding - assuming your W-2 wages are <$80k/yr, you only have to file IRS Form 941 on a quarterly basis and you'd make any payments with that as appropriate... IN ADDITION to your ES payments.
Why would OP have to file a 941? The entity will have to file a 941, but OP wouldn't file any additional 941.
Agreed - I was operating under the assumption - maybe incorrectly - that he was a single-member LLC/S-Corp.
"One of the funny things about the stock market is that every time one person buys, another sells, and both think they are astute" - William Feather

Topic Author
Jcdoc107
Posts: 23
Joined: Sun Sep 20, 2015 10:29 am

Re: Quarterly taxes with W2 and K1 income

Post by Jcdoc107 » Tue Jan 10, 2017 4:25 pm

I am an active general partner. Does a W2 of >80K/yr change anything?

MarkNYC
Posts: 1516
Joined: Mon May 05, 2008 7:58 pm

Re: Quarterly taxes with W2 and K1 income

Post by MarkNYC » Tue Jan 10, 2017 4:49 pm

Jcdoc107 wrote:I have not been able to find an answer to this question.

I have both W2 and K1 income. The majority is K1 income. Is it possible to not withhold anything from my W2 and pay quarterly taxes on both W2 and K1 income or am I required to withhold from my W2 and pay quarterly on my K1 income?
I don't believe the IRS will permit you to have zero federal tax withheld from your salary unless you can demonstrate an expectation that your federal tax will be zero for the year. Substituting estimated payments for withholding does not allow you to have zero withholding, although it does hide the infraction and makes it less likely that the IRS will pursue the matter.

strafe
Posts: 927
Joined: Sat Mar 03, 2007 12:49 pm

Re: Quarterly taxes with W2 and K1 income

Post by strafe » Tue Jan 10, 2017 5:00 pm

it might be beneficial for you to do just the opposite -- withhold as much as possible from your W2 income, and eliminate or minimize your quarterly estimated tax payments. Your total annual W2 withholding is treated by the IRS as if it were paid evenly throughout the year, which can eliminate penalties or hassles arising from bad timing of estimated payments.

Topic Author
Jcdoc107
Posts: 23
Joined: Sun Sep 20, 2015 10:29 am

Re: Quarterly taxes with W2 and K1 income

Post by Jcdoc107 » Tue Jan 10, 2017 5:08 pm

strafe wrote:it might be beneficial for you to do just the opposite -- withhold as much as possible from your W2 income, and eliminate or minimize your quarterly estimated tax payments. Your total annual W2 withholding is treated by the IRS as if it were paid evenly throughout the year, which can eliminate penalties or hassles arising from bad timing of estimated payments.
Even if I withhold all of my W2 income I will still have to pay quarterly but I won't have anything left over to contribute to 401k, etc. That was my reasoning for considering paying quarterly on all income if possible.

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