How do I calculate and pay quarterly estimated taxes to the Franchise Tax Board for my sole proprietorship or single-member LLC?

To pay quarterly estimated taxes in California for your sole proprietorship or single-member LLC, you must estimate your annual business profit, calculate the resulting personal income tax, and pay it to the Franchise Tax Board (FTB) in four installments throughout the year. Here is how to calculate and pay your estimated taxes: Step 1: Estimate Your Annual Net Income Project your total business revenue for the year and subtract all anticipated deductible business expenses. Use your business's past performance and future expectations to make a reasonable estimate of your net profit. This is the income that "passes through" to you and is taxed on your personal return. Step 2: Calculate Your Required Annual Payment Use the worksheet on California FTB Form 540-ES, "Estimated Tax for Individuals," to calculate your total state tax liability. To avoid penalties, you must generally pay the lower of two amounts: 90% of your estimated current year's tax, or 100% of your prior year's tax liability (110% if your prior year Adjusted Gross Income was over $150,000). Step 3: Determine and Pay by the Deadlines Divide your required annual payment (from Step 2) by four to determine your quarterly payment amount. If your income fluctuates, you can adjust payments in later quarters. Submit your payments to the FTB by the following deadlines: - Payment 1: April 15 - Payment 2: June 15 - Payment 3: September 15 - Payment 4: January 15 (of the following year) Step 4: Choose Your Payment Method Pay online for free using FTB's Web Pay system. Alternatively, you can mail a check or money order with the appropriate Form 540-ES payment voucher for that quarter. You can find forms and payment options on the FTB website (ftb.ca.gov). Important Details and Nuances: For single-member LLCs, you must also pay a separate, non-negotiable $800 annual LLC tax using Form 3522, due by the 15th day of the 4th month after your LLC is registered. Depending on your gross revenue, you may also owe an additional LLC Fee. These LLC payments are separate from your personal estimated income tax payments on business profits. Warnings and Limitations: The FTB can charge penalties for underpayment of estimated tax, even if you receive a refund when you file your annual return. It is crucial to distinguish between your personal estimated tax payments (Form 540-ES) and the separate LLC annual tax (Form 3522) and fee, as they are paid differently and have different due dates. This is general information and does not constitute legal advice. For complex situations or personalized tax planning, consult with a qualified California attorney or tax professional.