I created a new LLC on 10/7/20. I received $0 income for 2020 (I do have $2,500 in expenses to claim). Should I file for 2020, or can I wait until a year to file w/ 2021?

[Ereese17]

I heard that opening a LLC within 90 days of a tax year, and has zero revenue, could push their filing back a year.  Want to make sure this is correct?

[DavidD66]

If you created an LLC and you are the only member, then the IRS considers the LLC a disregarded entity for tax purposes.  You will file the LLC's income and expenses with your personal tax return on Schedule C- Self Employment.  There is no 90 day exception.  If you want to claim the expenses incurred in 2020, you will have to report the expenses on Schedule C on a 2020 tax return.  The expenses (with no income) will create a loss which will offset any ordinary income you have.

[Ereese17]

Thanks David...funny enough I just spoke to TurboTax phone tax support, and they brought the 90 day rule up (LLC formation within 90 days + zero revenue) and being able to push out those taxes another year.  Meaning for 2021 I could carry over the ~$2,500 expenses.  Is that not true?  Correct - I can file as a disregarded entity.

[ColeenD3 · Accepted solution]

While you may be able to use the 90 day rule, this does not allow you to take expenses from one year and move them to the next.

In most states though, you can make your LLC go into existence in the future (typically not more than 90 days ahead). This is most often referred to as using a “delayed effective date“. 90 day rule

Since your LLC actually opened in 2020 and you have expenses for 2020, it makes no sense to postpone the start date.

You can amortize start-up costs from a period from before the business opened and expenses after it opened. You can find this in the depreciation section.

• Intangibles, Other property
• Land Improvements
• Amortizable Intangible Property (such as mortgage points)
• Other Property

Start up costs are those expenses incurred in planning and setting up the business, costs you incur before you open the door.

A portion of startup and organizational costs can be expensed (written off in your first year). The remainder can be amortized (written off over a period of 15 or more years).

Here is how it works:

Expenses paid or incurred after October 22, 2004: 

 - You can deduct up to $5,000 in startup and $5,000 organizational costs as current expenses if the costs are under $50,000, respectively.

 - You can choose to amortize startup and organizational costs greater than $5,000, respectively, (but less than $50,000, respectively) over a period of 15 years.

 - If your startup or your organizational costs are more than $50,000, respectively, the excess amount reduces the amount you can deduct.