Expert: Arthur Naman - 6/6/2009

Question
I have set up a single member disregarded LLC for consulting. Can I avoid paying quarterly estimated tax by establishing a payroll and paying myself a monthly paycheck.  I assume all proper deductions will be taken from the paycheck. Should I receive payments totaling more than the sum of my payroll checks, can I issue a paycheck at year end pay myself the remainder.

Answer
No, quarterly payroll taxes are due regardless of the pay period:  weekly, biweekly, semimonthly or monthly, or other periodic payment method for that matter.

The payroll taxes owed are simply based on when you write out a paycheck.

Having said, normally a single member LLC is setup as a sole proprietorship. Payments from a sole proprietorship to its owner are not considered payroll; payments from a corporation are payroll on the other hand.

So, if you have a sole proprietorship I do not believe payments to you as the owner would be considered subject to payroll taxes.