Need help on LLC Income and Estimated Tax Payment for Members.?

Question

Our LLC is structured as profit sharing only at the end of each calendar year and no "guaranteed payments" to member-manager whatsoever. Are members obligated to pay estimated income tax every quarter eventhough we don't receive any income distribution yet? Is it needed for the LLC to create Quarterly Income Statement and the members will pay "estimated tax" based on those figures?

Please help. Thanks.

Answer #1 clarification:

If it is not necessary for an LLC to create a Income/Loss statement every quarter then how can the members know their tax obligation as the months go by? Is it okey if members will pay after the year ends?

Answer 1

An LLC is a disregarded entity as far as taxes are concerned. If it's a multi-member LLC, it has to file a US Partnership return on Form 1065 and distribute Schedule's K-1 to all members. The members are responsible for paying taxes on the taxable amounts listed on the K-1s, whether they receive any distribution of income or not.

It's up to the members to determine if they need to make estimated tax payments. The LLC should provide some sort of periodic information on what the income picture looks like but isn't specifically required to do so.