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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?

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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Accepted Solutions
Khai
New Member

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?

You have 2 options for reporting these expenses:

  1. Have your partnership reimburse you for the expense(s) and they will be considered reimbursed expenses on the partnership side.
  2. 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.

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1 Reply
Khai
New Member

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?

You have 2 options for reporting these expenses:

  1. Have your partnership reimburse you for the expense(s) and they will be considered reimbursed expenses on the partnership side.
  2. 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.
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