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Level 2
posted Oct 14, 2021 6:18:14 AM

As single member LLC with zero revenue in 2021 due to pandemic, can I still claim business related expenses on schedule c?

I did receive unemployment as an independent contractor. Have purchased laptop to help restart my business.

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1 Best answer
Level 15
Oct 14, 2021 7:46:35 AM

Your LLC is not really a pass-through; as a single-member LLC without an election to be treated as a corporation, it is a disregarded entity for federal income tax purposes (essentially a sole proprietorship reporting on Schedule C).

 

You can most likely use the de minimis safe harbor election to expense the laptop, assuming it is within the prescribed limits.

 

See https://www.irs.gov/businesses/small-businesses-self-employed/tangible-property-final-regulations#Ademinimis

3 Replies
Level 15
Oct 14, 2021 7:10:07 AM

You can still deduct your ordinary and necessary business expenses regardless of whether you had income provided your business continued normal operations.

Level 2
Oct 14, 2021 7:34:15 AM

Thanks, just to clarify; no income for sure, question regards having zero revenue yet business expense. Trying to restart the business, had to buy laptop which would like to expense in 2021 against personal income as it is a pass through lLC.

 

Level 15
Oct 14, 2021 7:46:35 AM

Your LLC is not really a pass-through; as a single-member LLC without an election to be treated as a corporation, it is a disregarded entity for federal income tax purposes (essentially a sole proprietorship reporting on Schedule C).

 

You can most likely use the de minimis safe harbor election to expense the laptop, assuming it is within the prescribed limits.

 

See https://www.irs.gov/businesses/small-businesses-self-employed/tangible-property-final-regulations#Ademinimis