New Sole Member LLC Needs Help

[nightblossom]

Hello, I am a new Sole Member LLC Owner and need some help with my taxes. I am doing self filing on Tax Slayer.

I received a 1099-MISC with $444 in Box 2 for Royalties. According to Tax Slayer, I need to carry over this income to a Schedule E. However, I have read that as a Sole Member LLC, I have to file a Schedule C, but I have no income to report on there. I have electronics I purchased for the business, which I understand I have to depreciate. Do I depreciate on the Schedule E or on the Schedule C? What else goes on the Schedule C? I also paid an attorney $1200 to start the LLC for me. Where does this go?

Also, the money I received was direct deposited into a business bank account which I never withdrew. It is still sitting there. If I withdraw it now, is that a problem? Any help would be appreciated.

[DavidD66]

You will report your Royalties on Schedule E.  Based on your post, that's all you report on Schedule E.  Whether or not you depreciate the electronics or expense them depends on the cost, and whether you elect to expense or capitalize items greater than $250, but less than $2,500.  Any expenses related to your business (your LLC) are reported on Schedule C, including the attorney fees.  

There is no issue with withdrawing the royalty money from the business bank account.  It's your money. 

[nightblossom]

Thank you, so here are the costs of my electronics I use solely for my business:

Playstation 5: $540

Computer: $1682

Drawing Tablet: $325

Based on what I have read, I have to depreciate these items. Would be better if I could put them as supplies, but I don't think I can.

[nightblossom]

Thank you, so here are the costs of my electronics I use solely for my business:

Playstation 5: $540

Computer: $1682

Drawing Tablet: $325

Based on what I have read, I have to depreciate these items. Would be better if I could put them as supplies, but I don't think I can.

[nightblossom]

Thank you, so here are the costs of my electronics I use solely for my business:

Playstation 5: $540

Computer: $1682

Drawing Tablet: $325

Based on what I have read, I have to depreciate these items. Would be better if I could put them as supplies, but I don't think I can.

[npierson7]

You use a special depreciation allowance and depreciate those items in your first year of your business. 

The allowance is an additional deduction you can take after any section 179 deduction and before you figure regular depreciation under MACRS for the year you place the property in service."

TurboTax will offer this bonus depreciation during the asset interview sequence if your property qualifies for this special allowance. 

You can learn more about that here:

Depreciation of Business Assets