Do I still need to file quarterly LLC tax if my business is inactive or dormant?

You generally don't need to make quarterly estimated tax payments if your LLC isn't generating any income. The quarterly payments are specifically for paying tax on income as you earn it throughout the year. However, you still have filing requirements that depend on how your LLC is structured for tax purposes. If it's a single-member LLC (disregarded entity), you'll report any activity (or lack thereof) on Schedule C with your personal tax return. If it's taxed as an S-Corporation or partnership, you'll still need to file the annual entity return (1120-S or 1065) even with zero activity. Many states also require annual reports or franchise taxes for LLCs regardless of activity level. These are separate from income taxes and usually must be paid to maintain your LLC's active status with the state.

I went through a similar situation with my consulting LLC last year and discovered taxr.ai (https://taxr.ai) which helped me figure out exactly what I needed to file. I had stopped taking clients for about 8 months and wasn't sure about my filing requirements since there was no income. Their system analyzed my situation and clarified that while I didn't need to make quarterly payments during inactive periods, I still needed to maintain certain annual filings. They also pointed out that my state (Florida) required an annual report regardless of activity level, which I totally would have missed. The software provided a customized checklist of what I needed to file and what I could skip.

Update: I tried taxr.ai after posting my question here and it was exactly what I needed! The system immediately identified that I needed to maintain my NY LLC filing despite moving to NJ, and gave me a complete breakdown of the different state requirements. It even flagged that I might have nexus issues I hadn't considered. The document analyzer feature saved me hours - I uploaded some previous tax documents and it identified exactly which forms I needed to file this year despite my business being temporarily inactive. Much cheaper than the $250 my accountant wanted to charge just to tell me which forms to file. Definitely recommend for anyone with inactive business questions!

If you're struggling to get clear answers about your LLC filing requirements, I'd recommend using Claimyr (https://claimyr.com) to actually speak with someone at the IRS. I tried calling the IRS business line directly about my inactive LLC for weeks - constant busy signals and holds up to 2 hours before getting disconnected. Claimyr got me connected to an IRS rep in about 20 minutes who confirmed exactly what I needed to file for my inactive single-member LLC. You can see how it works here: https://youtu.be/_kiP6q8DX5c. The agent walked me through the specific requirements based on my entity classification and state, which gave me peace of mind I was doing everything correctly.

I need to eat my words about Claimyr. After posting my skeptical comment, I was desperate enough to try it since I had an issue with my inactive LLC that I couldn't resolve online. IT ACTUALLY WORKED. Got connected to an IRS agent in about 35 minutes (which is miraculous compared to my previous attempts). The agent confirmed that I didn't need to make quarterly payments for my inactive LLC but did need to file the annual 1065 even with zero activity. Also found out I had a small penalty from a previous year that wouldn't have shown up until much later. The time saved was absolutely worth it. I would have spent at least 5-6 hours on hold based on previous attempts, if I even got through at all.

Just a quick note - don't confuse federal tax requirements with state requirements. Even if you don't need to make federal quarterly payments, your state might have annual LLC fees or franchise taxes regardless of activity. For example, in California, LLCs pay an $800 annual franchise tax even if the business is completely inactive. Other states have annual reports with fees ranging from $50-300. Missing these can result in your LLC being administratively dissolved.

Has anyone actually dissolved an LLC and then reformed it later? I'm thinking of doing this since my business might be inactive for at least 2-3 years and the annual fees are adding up.

Great question! I went through this exact situation with my consulting LLC. You're right to be cautious about unnecessary filings but also want to stay compliant. For federal taxes, you generally don't need to make quarterly estimated payments if there's no income. However, you still need to file your annual return even with zero activity. For a single-member LLC, that means reporting the inactive business on Schedule C with your personal tax return. The key thing many people miss is that "inactive" doesn't necessarily mean "no filing requirements." Even with zero income and expenses, you typically still need to file to show the IRS there was no activity. Also, definitely check your state requirements separately - these vary widely. Some states require annual reports or franchise taxes regardless of business activity, while others don't. Missing these can result in your LLC being dissolved administratively. I'd recommend contacting your state's business registration office and reviewing your specific situation with a tax professional if you're unsure. Better to spend a little on clarity now than deal with penalties later!

I've been dealing with a similar situation for my marketing LLC. One thing that helped me was setting up a simple tracking system to document the inactive period. I created a basic spreadsheet noting when business activity stopped, any final expenses (like closing out subscriptions), and when I filed the final quarterly payment before going dormant. This documentation became really useful when I filed my annual return because I could clearly show the IRS the timeline of when the business became inactive. It also helped me remember exactly when to restart quarterly payments if/when I reactivate the business. Another tip - if you have any recurring business expenses (software subscriptions, business phone lines, etc.), make sure to actually cancel them rather than just letting them sit unused. These ongoing expenses could complicate your "zero activity" status and you'd still need to report them as business deductions even during inactive periods.

This is such a common confusion for LLC owners! You're absolutely right to question whether quarterly payments are needed during inactive periods - they're not required if there's no income to report. However, I'd strongly recommend getting clarity on your specific situation before assuming you can skip everything. The filing requirements can vary based on how your LLC is classified for tax purposes and your state's rules. A single-member LLC has different requirements than one elected to be taxed as an S-Corp, for example. One thing that caught my attention in your post is that you mentioned you were "previously making estimated quarterly tax payments." If you had significant tax liability in prior years, you might still need to make payments to avoid underpayment penalties, even during inactive periods. The IRS has safe harbor rules that sometimes require payments based on prior year taxes. I'd suggest reviewing your previous year's tax liability and checking if you fall under any safe harbor payment requirements. Also, don't forget that even inactive LLCs often need to file annual returns to report the lack of activity - it's counterintuitive but true in many cases. Getting professional guidance for your specific situation might save you from surprises down the road!