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ik
Level 3

Startup Costs Start/End Timeline

I started working on creating my business in January. I incorporated (LLC taxed as S corp) in June. And I opened my retail space in December. When does the startup costs period end? Is it when I incorporated or opened the doors for business? Thanks!

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3 Replies

Startup Costs Start/End Timeline

The period ends when you are open for business.

Carl
Level 15

Startup Costs Start/End Timeline

I started working on creating my business in January. I incorporated (LLC taxed as S corp) in June. And I opened my retail space in December.

So for all intents and purposes you have no reason to file a SCH C at all. Your startup costs are those expenses incurred prior to being "open for business". The fact you initially registered as an LLC and then incorporated in June means that you have absolutely nothing what-so-ever to report on SCH C. All of your business stuff including startup expenses will be reported on the 1120-S corporate return.

Be aware that the "drop dead due date" for the 1120-S is March 15th. If you're even one day late filing it then the late filing penalty is $200 per day, per owner/member. So don't be late!

You'll need to complete and file the 1120-S before you can even start your personal 1040 tax return. That's because the S-Corp will issue each owner a K-1 which each owner will require in order to complete their personal 1040 tax return. So make sure you have that 1120-S spot on perfect before you file it. If you mess something up and have to amend it, then changes are you'll have to issue yourself and the other owner's an amended K-1 which means you'll have to file an amended personal 1040 tax return too.

So if you've never dealt with corporate taxes before, start the 1120-S ***EARLY***. Otherwise, you'll find yourself in a quagmire that will cost you $dearly$ in the long run.

 

Startup Costs Start/End Timeline

Extensions for business and personal returns are available so you'll have extra time to file if you need to. Get a tax pro to do your returns anyway if you've never filed a return for an S corp before....you want to start off on the right foot.

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