Hi - my partner and I started an LLC last year but used personal cards for initial business expenses. Do we report these expenses on the 1065 or individual 1040s?

Forum|Forum|7 years ago
June 6, 2019
1 reply
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We did not have a chance to open up a banking account until late in the year and had no profits with which to make initial start-up purchases, so all early expenses were incurred on personal credit/debit cards. Are these reported on the 1065 or on our individual 1040s? It seems to me that only expenses paid through a business card/account would be reported on a 1065 but I could be wrong. Thanks for any guidance!

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You have 2 options for reporting these expenses:

Have your partnership reimburse you for the expense(s) and they will be considered reimbursed expenses on the partnership side.
Deduct them on your personal tax return as a miscellaneous itemized deduction on Schedule A (Form 1040). Keep in mind that this option will limit your deduction to 2% of your adjusted gross income.

Anonymous

Answer

You have 2 options for reporting these expenses:

Have your partnership reimburse you for the expense(s) and they will be considered reimbursed expenses on the partnership side.
Deduct them on your personal tax return as a miscellaneous itemized deduction on Schedule A (Form 1040). Keep in mind that this option will limit your deduction to 2% of your adjusted gross income.