First, you are not required to file a return. However, you can take start-up costs.
Start up costs are those expenses incurred in planning and setting up the business, costs you incur before you open the door.
A portion of startup and organizational costs can be expensed (written off in your first year). The remainder can be amortized (written off over a period of 15 or more years).
Here is how it works:
Expenses paid or incurred after October 22, 2004:
- You can deduct up to $5,000 in startup and $5,000 organizational costs as current expenses if the costs are under $50,000, respectively.
- You can choose to amortize startup and organizational costs greater than $5,000, respectively, (but less than $50,000, respectively) over a period of 15 years.
- If your startup or your organizational costs are more than $50,000, respectively, the excess amount reduces the amount you can deduct.
If you are filing 2 schedule C forms, you split every income and expense. The forms maybe identical except for your names. It does not matter what the percentages are as long as:
- the LLC is wholly owned by the husband and wife as community property under state law
- no one else would be considered an owner for federal tax purposes, and
- the business is not otherwise treated as a corporation under federal law.
