If I buy 1% of a business do my wife and I start paying taxes quarterly?

Answer 1

You don't "pay" taxes quarterly but you may need to make estimated payments quarterly if you expect to increase your income because of this business. Not knowing what your other tax circumstances are I am only guessing that your other income is wages which are reported to you and the IRS on a W-2 form. If you believe that everything other than the "1% business" will be about the same you need only calculate the possible tax on the income from the "1% business". Depending when you started the "1% business" you may have very little income this year. You need to get an estimated income from someone at the "1% business" and determine how they plan on paying you if at all.

Answer 2

It depends on how you buy 1% of the business. If you buy stock in a 'C' corporation, you are taxed on dividends when received and capital gains when you sell the stock. If your form of ownership is such that 1% of the companies income is taxed as personal income to you, you can either make quarterly estimated payments, or increase withholding from your regular paycheck (assuming you have one) to cover taxes on the business income. I recommend consulting a tax professional for advice.