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I started a business sole proprietorship LLC in november 2021 i have had no income/expenses in 2021 or 2022 do i need to file anything and how can i go about it?

 
4 Replies

I started a business sole proprietorship LLC in november 2021 i have had no income/expenses in 2021 or 2022 do i need to file anything and how can i go about it?

If you have had no business activity there is nothing to report. 

Carl
Level 15

I started a business sole proprietorship LLC in november 2021 i have had no income/expenses in 2021 or 2022 do i need to file anything and how can i go about it?

There's no such thing as a "sole proprietorship LLC".  Either it's a sole proprietorship, or it's a single member LLC. If the latter, then you had to register with the state and pay a fee to maintain that status in 2021, as well as 2022. Therefore, you had expenses.

If you were "open for business" in the tax year, weather you had income or not doesn't matter. I'm sure you still had expenses if you are "in fact" a legally registered LLC. Therefore you would file a tax return for each year starting with the tax year you were officially "open for business". If anything, so you could claim the expenses.

Take note that "in general" if your LLC does not show a profit in 3-5 years, that has the potential to get the attention of the IRS and they may question you on the legitimacy of your business.

Now if you were not officially open for business in 2021 or 2022, then you don't need to file a SCH C at all. I've seen situations where a business is established and it can take 3-5 years before they are officially capable of being open for business.

 

I started a business sole proprietorship LLC in november 2021 i have had no income/expenses in 2021 or 2022 do i need to file anything and how can i go about it?

pay a fee to maintain that status in 2021, as well as 2022. Therefore, you had expenses.

Not always true because a bunch of states don't charge a fee for an annual report. Lots and lots of other states charge a very small fee......like $10 or $15 or $30.....not worth even bothering to report on a Sch C if that's all there is.

I started a business sole proprietorship LLC in november 2021 i have had no income/expenses in 2021 or 2022 do i need to file anything and how can i go about it?

If you are actively engaged in the business, you report your expenses and income, even if you only have expenses and no income.  Actively engaged might mean that you are advertising for clients, performing work "on spec", negotiating contracts, starting work for which you will be paid later, and so on.

 

Separately from your tax requirements, you might have state law requirements to pay an annual registration fee for your LLC or to file a report, even if the report says "I didn't do anything this year."  LLCs are governed by state law and every state is different, so make sure you know your state requirements. 

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