LLC

[Mike C4]

Hello, 

January 2024, I established an LLC. As of now I did not make any money and I'm not collecting taxes. I'm spending money on equipment and learning materials. Do I need to file every 3 months? and filling next year do I combine my personal and business in one return. How does it work? I never had to do this in the past. So, I'm not sure how to go about it. 

Thank you 

[DrKButler2024]

I have a similar question. The only difference is I am not buying equipment. I just launched a single-member LLC in March. How does tax filing work and when should I begin? 

[dsoile]

Hello Mike

From what you have mentioned, you just have start-up expenses for your business (money you are spending on equipment and learning material). Up to $5,000 out of total start-up expenses can be automatically deducted as a business expense in first tax year of business, with the remaining amount being amortized, thus deductible over the course of 15 years (equal amount every year during that 15 year period). *Note, if you have start up expenses that exceed $50,000, the amount in excess of the $50,000 will reduce the $5,000 in start-up expenses you can automatically deduct in first tax year of business*

Depending on whether or not your business is a single member LLC or multi-member LLC, and specifically on how either business structure is treated for federal tax purposes, how you file your business and individual taxes will differ. Lets say you are a single member LLC, you will just file a regular Form 1040, which will include a Schedule C (one of the forms in the 1040) to report your business . If your business is a multi-member LLC, then you will file a separate business return, which will yield a K-1 for that return, which you will use in your Form 1040. 

By filing every 3 months, I am assuming you are referring to quartery estimated tax payments....Estimated tax payments are made every quarter and due at the following dates: 1)  April 15th for Q1, 2) June 15 for Q2, 3) September 15th for Q3, and 4) January 15th of the following year for Q4.

Since you mentioned that the business is currently not bringing in any money at the moment, and no mention of any other factors that can impact your income, please refer to the following questions below:

1. Will you owe less than $1,000 in taxes for the tax year after subtracting your federal income tax withholding from the total amount of tax you expect to owe this year? 
2. Do you expect your federal income tax withholding to amount to at least 90 percent of the total tax that you will owe for this tax year? 
3. Do you expect that your income tax withholding will be at least 100 percent of the total tax on your previous year's return? 

If you answered no to these questions, then you must make estimated quarterly tax payments. 

[Mike C4]

How much does it cost to hire a CPA to do my Taxes?