It depends -
If the LLC was formed but not opened for business until 2018, then you will have no 2017 tax filing requirements related to your LLC.
However, if the LLC was actually opened for business in 2017 but had no sales until 2018, you will still need to file a 2017 income tax return related to your LLC.
Until that point when you actually start operation, you
will just have start-up/organization cost (this would include any franchisee
fee) and you will not be able to claim any expenses related to start-up until
your business begins operations.
You may elect to deduct up to $5,000 of start-up costs
in the year your business begins operations. The $5,000 first-year deduction
limit is reduced by the
amount of start-up costs exceeding $50,000. (You would include this as
under business income and expenses - "Other Common Business
Expenses"> "Other Miscellaneous Expenses" and enter here (as
start-up costs).
Start-up costs that
exceed the first-year limit of $5,000 may be amortized ratably over 15 years.
The amortization period starts with the month you begin operating your active trade or
business. (Include any remaining start-up cost under the asset section of
business income and expenses.)
Start-up costs include amounts paid for the following:
- An analysis or survey of
potential markets, products, labor supply, transportation facilities, etc.
- Advertisements for the
opening of the business.
- Salaries and wages for
employees who are being trained and their instructors.
- Travel and other necessary
costs for securing prospective distributors, suppliers, or customers.
- Salaries and fees for
executives and consultants, or for similar professional services.
For example, you began business operations July
1, 2017, had start-up costs of $35,000.
You may deduct
$6,000 in 2017 (First-year limit, $5,000, plus First
year's amortization, $1,000).
A full year's
amortization would be $2,000 ($35,000 minus $5,000 divided
by 15). Since the amortization period began July 1, 2017 (the month
business operations began), the first year's
amortization is one half of $2,000 or $1,000.
For the amount of business expenses after you
started your business -
You will be able to
expense any eligible business costs incurred after you started your
business.
Please refer to this
IRS link for more information about Business
Expenses
