New LLC (Domestic Limited Liability Partnership) , Startup Costs, No Income yet

[Lucky33]

Hi, we have a new farming venture and need some guidance. We should've waited to "open for business" until 2023 but chose to officiate things on 12/30/22 as we were concerned we wouldn't be able to write off our expenses. Now we know we could've done this in 2023. Oops. We have no income yet and we didn't spend more than $5000 last year. As Turbo Tax walks you through the expense portion first, we entered our expenses but they are Really startup costs. We assume we move those "Expenses" to "Startup Costs"???? Do we then need to itemize every expense as a startup cost since it wants to know the date Incurred or can we put multiple items under one word (like "supplies" for things like seeds, plants, hose, hand tools, uniform, etc)? Also, if we are entering multiple items under one word, what date do we list for being incurred if there were multiple dates?

[AliciaP1]

Yes, you should move your expenses to Startup Costs.  It won't make as much difference in the long run to you because of the dollar amount you have listed, but Startup Costs are spread out differently, and the whole amount (if it's over $5,000) isn't allowed to be taken in the first year.  You can opt to only take a portion of the allowable $5,000 in the first year, but the remaining amount is spread out and deducted over the next 180 months.  You can see Starting a Business for more information.

When you are entering your Startup Costs in TurboTax you can enter a summary line like "Startup costs, $5,000, 12/15/2022" (with an arbitrary date near but before your actual start date), if you have the detailed transactions tracked somewhere else.  If you only have receipts, I would suggest itemizing the information in TurboTax so you have a detailed record somewhere.

[Lucky33]

Thanks for the response.

Another question, does this mean that under my Farming Net Profit/Loss Summary, my business name will be listed with no Gross Income, Total Expenses or Net Profit? 

[AliciaP1]

Yes, but it will have a net loss from amortization expense for Startup Costs.

@Lucky33