How to Pay Quarterly Taxes for a Multi-Member LLC

If you’re a member of a multi-member LLC, you pay quarterly taxes yourself, not through the business. The LLC files an informational return, but the tax bill belongs to each member individually. Four times a year, you send the IRS an estimated payment on Form 1040-ES that covers both federal income tax and self-employment tax on your share of the LLC’s profits. Here’s how to figure the amount, when to send it, and how to keep the penalty clock from starting.

Why the Payment Obligation Falls on You

By default, the IRS treats a multi-member LLC as a partnership. The LLC files Form 1065 to report income, deductions, and credits, but that return carries no tax payment.¹ Each member receives a Schedule K-1 showing their share of the profits or losses, and that share flows onto the member’s personal Form 1040, where the tax gets calculated.

Nothing is withheld along the way. A W-2 job hands the IRS a piece of every paycheck; an LLC does not. You are the one keeping the account current, and the mechanism for doing that is the quarterly estimated payment.

The Two Taxes Your Payment Covers

Every quarterly check has to cover two separate liabilities.

The first is federal income tax on your share of the LLC’s profits, taxed at your marginal rate together with the rest of your income.

The second is self-employment tax. As an active member of the LLC, you owe both halves of Social Security and Medicare that a W-2 employer would ordinarily split with you. The combined rate is 15.3% — 12.4% for Social Security and 2.9% for Medicare.² It applies to 92.35% of your net self-employment earnings, not to the gross figure.³

Two caps and a surtax matter for how much SE tax you actually owe:

The 12.4% Social Security portion only applies to earnings up to the annual wage base. For 2026, that cap is $184,500.⁴
The 2.9% Medicare portion has no cap.
If your self-employment income exceeds $200,000 as a single filer, or $250,000 filing jointly, an extra 0.9% Additional Medicare Tax applies to the amount above the threshold.⁵

One offset softens the SE tax hit. You can deduct half of your self-employment tax as an adjustment to income on your 1040.⁶ That doesn’t reduce the SE tax itself, but it lowers your adjusted gross income and therefore your income tax. Build the deduction into your quarterly estimate so you’re not overpaying.

How Much You Have to Pay: The Safe Harbors

The IRS doesn’t demand a perfect forecast. It gives you two thresholds, and hitting either one blocks an underpayment penalty even if you end up owing more at filing. Your required annual payment is the lesser of:

90% of the tax you’ll owe this year, or
100% of the total tax shown on your prior year’s return.

If your AGI on last year’s return topped $150,000 ($75,000 if married filing separately), the prior-year figure jumps to 110%.⁷ Each installment is 25% of whichever annual figure you pick.

The prior-year method is usually the simpler path. Your total tax from last year is already a known number. Divide by four and you’re done, with no penalty risk regardless of what happens to your income this year. The tradeoff is that if you earn less this year than last, you’ll overpay and wait for a refund or roll it forward.

The current-year method (90% of this year’s liability) fits members whose income has climbed sharply and who don’t want to pay based on a much smaller prior year. It asks for a real forecast of the LLC’s profits, your other income, and your deductions.

Working Out Each Installment

The practical calculation runs in this order:

Estimate your share of LLC income. Start with the LLC’s projected net income for the year, apply your ownership percentage or the allocation your operating agreement specifies, and add any guaranteed payments.
Add every other source of income you expect: W-2 wages, investment income, rental income, anything landing on your 1040.
Calculate self-employment tax. Multiply net LLC earnings by 92.35%, then apply the 15.3% rate, watching the $184,500 Social Security cap. Add the 0.9% Additional Medicare Tax if your income crosses the threshold.³⁵
Calculate income tax on total taxable income after deductions, including the deduction for half of your SE tax.
Subtract any federal withholding from W-2 jobs (yours or a spouse’s if filing jointly). You only need to close the gap through quarterly payments.
Divide by four for equal installments, or use the annualized method described below if your income arrives unevenly.

The worksheet in Form 1040-ES walks through each line.⁸ Complete it at least once a year even if you’re leaning on the prior-year safe harbor, as a sanity check against a big under- or overpayment.

When Income Is Uneven: The Annualized Method

Many LLCs earn most of their money in a few months. A seasonal business shouldn’t be paying the same amount in January as it does in July. The annualized income installment method lets you match each payment to what you’ve actually earned through that point in the year rather than sending a flat 25% every quarter.

You total your income and deductions through the end of each period, annualize the result, and compute the required installment from that projected liability. Report the calculation on Schedule AI of Form 2210. If you use the method for one period, you must use it for all four.⁹

The 2026 Payment Deadlines

The IRS splits the year into four uneven periods, each with its own deadline:¹⁰

January 1 through March 31: payment due April 15
April 1 through May 31: payment due June 15
June 1 through August 31: payment due September 15
September 1 through December 31: payment due January 15 of the following year

When a deadline lands on a weekend or federal holiday, it moves to the next business day. If you file your annual return and pay any balance in full by January 31, you can skip the January 15 installment. Taxpayers in federally declared disaster areas get automatic postponements published on the IRS disaster relief page.¹¹

How to Send the Payment

IRS Direct Pay is the fastest option. It pulls from your bank account, gives you an immediate confirmation number, and needs no advance enrollment. Go to irs.gov/directpay, choose “Estimated Tax” as the payment type, and follow the prompts.

The Electronic Federal Tax Payment System (EFTPS) used to be the standard for self-employed filers because it lets you schedule payments up to a year out and view 15 months of history. Individual taxpayers can no longer create new EFTPS accounts, though existing users can keep using it.¹²

You can also pay by credit or debit card through IRS-approved processors (which charge a fee) or mail a check with a Form 1040-ES voucher. Whichever method you pick, keep the confirmation. If the IRS challenges whether you paid on time, the burden of proof is yours.

Make Sure the LLC Distributes Cash for Taxes

Here’s the trap unique to multi-member LLCs. You owe tax on your allocated share of profits whether or not the LLC actually distributes cash to you. If the managing members decide to reinvest earnings, the K-1 still lands, and you still owe on it. That’s phantom income, and it can leave you funding the IRS payment out of personal savings on money you never received.

The fix is a tax distribution clause in the operating agreement. This provision requires the LLC to distribute enough cash each period to cover each member’s estimated tax on the pass-through income, usually calculated by applying an assumed combined rate (often 40% to 45%) to allocated taxable income. Well-drafted versions time the distributions to hit a few days before each quarterly deadline. If your operating agreement doesn’t have one, get one added before the next payment cycle.

What Happens If You Underpay

If your total payments — quarterly estimates plus any withholding — fall short of a safe harbor, the IRS applies an underpayment penalty under Section 6654. It isn’t a flat fee. The penalty works like interest on the shortfall, running from each quarterly deadline until you make it up.⁷ For the first quarter of 2026, the rate is 7% per year, compounded daily.¹³ The rate resets quarterly with the federal short-term rate, so it can move during the year.

The penalty is figured on Form 2210 and filed with your annual return. Waivers exist for limited situations like casualty, disaster, retirement after age 62, or disability during the tax year, but they aren’t automatic. You have to show the underpayment came from that unusual event, not from ordinary poor planning.¹⁴

The cleanest way to shut off the penalty is to lock in the prior-year safe harbor. Pay 100% of last year’s total tax (110% if last year’s AGI was over $150,000) split into four equal installments, and the underpayment penalty cannot reach you no matter what your current-year liability turns out to be.⁷

Don’t Forget State Estimates

Form 1040-ES only settles what you owe the IRS. Most states with an income tax require their own quarterly payments on pass-through LLC income, generally on the same four deadlines, using state-specific forms and portals. Some states also impose an entity-level tax that the LLC itself pays, and if the LLC operates in more than one state, allocation and apportionment rules decide how much income is taxable where. Handle those on their own tracks; the federal payment does not cover them.

1
Internal Revenue Service. About Form 1065, U.S. Return of Partnership Income
2
Office of the Law Revision Counsel. 26 USC Chapter 2 – Tax on Self-Employment Income
3
Internal Revenue Service. Topic No. 554, Self-Employment Tax
4
Social Security Administration. Contribution and Benefit Base
5
Internal Revenue Service. Topic No. 560, Additional Medicare Tax
6
Office of the Law Revision Counsel. 26 USC Subtitle A, Chapter 1, Subchapter B, Part VI – Itemized Deductions for Individuals and Corporations
7
Office of the Law Revision Counsel. 26 USC 6654 – Failure by Individual to Pay Estimated Income Tax
8
Internal Revenue Service. About Form 1040-ES, Estimated Tax for Individuals
9
Internal Revenue Service. Instructions for Form 2210
10
Internal Revenue Service. Estimated Tax FAQs
11
Internal Revenue Service. Tax Relief in Disaster Situations
12
Internal Revenue Service. EFTPS – The Electronic Federal Tax Payment System
13
Internal Revenue Service. Interest Rates Remain the Same for the First Quarter of 2026
14
Internal Revenue Service. Underpayment of Estimated Tax by Individuals Penalty