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Do I need to categorize my sole proprietor expenses?

I started a sole owner LLC in 2016.  I have a net loss for the year, as I have start-up costs and only a small amount of income.  I have all my expenses by date in a simple spreadsheet and they are not split by category. TurboTax is asking for expenses by category.  Before I take the time to categorize all these expenses, do I really need to split all my expenses up by category for 2016 taxes?

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Do I need to categorize my sole proprietor expenses?

Yes, it'll be necessary to enter those expenses in the proper categories that they belong to.

For example, if all your Wal-Mart purchases were for pens, paper, and water bottles for the office...you'd want to lump those expenses into the "Supplies Expense" or as an "Office Expense", or also, all your receipts for business meals (and entertainment) need to have their own category because the IRS treats that particular expense differently (meals and entertainment expense is only allowed at a rate of 50% of actual cost, but remember to enter the total into Turbo Tax and let the software handle the limitations).

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Highlighted
New Member

Do I need to categorize my sole proprietor expenses?

Yes, it'll be necessary to enter those expenses in the proper categories that they belong to.

For example, if all your Wal-Mart purchases were for pens, paper, and water bottles for the office...you'd want to lump those expenses into the "Supplies Expense" or as an "Office Expense", or also, all your receipts for business meals (and entertainment) need to have their own category because the IRS treats that particular expense differently (meals and entertainment expense is only allowed at a rate of 50% of actual cost, but remember to enter the total into Turbo Tax and let the software handle the limitations).

View solution in original post

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