LLC For Business Expenses

[kroy123pink]

Do you have to have a LLC or will a 1099 suffice to claim business expenses?

Also, if you have one rental property can you that is generating income, can you claim all expenses related to upkeep without a legitimate business

[Loretta P]

Hello kroy123pink, congratulations on your rental property!

You do not need to have an LLC to have a small business or rental.  You can operate using your social security number.  You would file rental activity on a form Schedule E attached to your personal return form 1040.

Rental income is normally considered passive income and is subject to the passive activity loss rules.

Helpful links:

Rental Property Deductions You Can Take at Tax Time 

This is a full page of helpful rental property tips:  Rental Property Tax Tips 

Taking Business Tax Deductions 

Depreciation of Business Assets 

New Small Business Legislation Benefits Both Businesses and Individuals 

[dev145]

Hello kroy123pink,

You do not have to create LLC in order to claim business expenses. LLC is mainly to protect your personal assets from any liability that might arise due to business activity. Please note each state has different rules. Those rules and type of work you do will have impact on LLC protection. 

Your 1099 is ok to claim related expenses. If you have a rental property, you can deduct any expenses related to that rental activity but you cannot combine or report expenses that are not related to this rental. It has to be reported separately under that particular business/activity.  

Thanks for participating in TurboTax's Ask the Expert event today. I hope this information was helpful!