What is the proper "Date Business Began" to use if I have zero transactions and have not yet done business. I am still in R&D phase.

Forum|Forum|7 years ago
May 31, 2019
1 reply
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I formed a c-corp in Delaware and dba a foreign entity in CA; typical setup for tech startups looking to eventually gain venture capital and investors. I am still in the research and development (R&D) phase of developing my product for my new company. I have not tried to sell any products and I have not generated any revenue to date. Not sure what date to use for 'date business began'?

TurboTax Business Windows

PatriciaV

Level 15

The date your business began is typically when you have organized (LLC, S-Corp, C-Corp, etc) and/or have an Employer Identification Number (EIN). Form SS-4, used to apply for the EIN, asks this question in Box 11 - refer to that document if you have a copy.

Even if you have no income for the year, you should file a tax return if the IRS is aware of your company's existence (via the EIN). The IRS will expect a tax return every year your business exists, even if the return reports no activity.

Expenditures for organizing your company or related to research and development can be expensed immediately or amortized, depending on IRS rules and/or how you choose to report them on your tax return.

Here are links to the IRS rules for costs you may have already incurred.

Business Start-Up and Organizational Costs

Research & Development Expenditures

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aryason1992

Level 2

There's a different question in TT for "When the business incorporated?". If what you say is true, then what is the difference between "When the business incorporated?" and "When business started?" (They are two separate questions in TT). I'm in the same situation, I incorporated on a date in 2019, have been doing development and research, haven't conducted any business yet, so I have a date down for "When the business incorporated" but I don't know what to put for "Date business began". On other tax related documents, we were able to state the date of inactivity through the end of the year, but this doesn't seem like an option in TT. Any advice is appreciated.

JohnB5677

Level 15

The date you incorporated is a date that's posted to the incorporation document. The date you started your business may be a little less specific. It's the date you opened your doors for business and started to advertise, gain clients and do productive work

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