So I've read that the time is calculated from the pattern of Bowsers hammer throws in 8-4 for any%.
I'm confused when to start my timer and I want to submit a run from Switch Virtual console. Anyone know when I should start the timer or does it even matter?

Timer offset aka starting in the negatives helps people but you can start with a time of 0 as well as far as I know there will be more answers later on. Timing starts on the first frame in the first level.

In smb1 any%, timing begins on the frame that "400" appears in the top right corner, and timing ends once the axe sprite in world 8-4 disappears. I would recommend setting your timer to begin at -2.74 because if you have it at that, you can press start on the title screen and begin your timer simultaneously, then, the frame "400" will appear once your timer reaches "0.00".

note: Frame counting a run is quite inaccurate, it's usually off by around 1~6 frames. So, the smb1 moderators / verifiers retime runs by looking at the Bowser pattern and the podaboo's jump height instead in the final room of world 8-4. They do this by using this website: creep.io/smb1 , which was made by smb1 runner Threecreepio.

The timer is purely for your own purposes (and your viewers', if you're streaming runs) to get an idea of how far ahead or behind you are. The moderators verifying your runs retime them regardless so however scuffed your timer is doesn't matter for verification purposes.