- single member LLC (California) established in August 2024
- online services marketplace; website and marketplace platform under development
- not yet open to customers (expected later in 2025); website unavailable to sign-up
- obviously no income yet but several startup and organizing expenses incurred in 2024 (~$9k) and in 2025 (will be another $9-10k).
Questions:
1)When should I claim startup deduction - TY 2024 or 2025?
I understand that the business startup deduction should be claimed in the year the business is operational. In 2024, my business was established (legally) but not operational (since no customers could use it). If I launch the website in 2025 (i.e. available for customer sign-ups), should I be claiming the deduction in 2025 taxes?
2) Should I even file a business tax return for 2024?
If answer to above is 2025, do I even need to file a business tax return for 2024? Are there any categories of expenses that I should deduct in 2024 taxes (e.g, home office or other)?
3) Is there a limited window of time to accumulate startup expenses?
Let's say my business will open to public on 10/1/2025. Is there a limit (e.g., 1 year) to how far back I can go for accumulating startup expenses? Can I include costs incurred more than a year ago, even before LLC was established (such as domain registration costs in Feb 2024, or home office costs incurred from June 2024)?
4) Any difference for Federal vs. CA?
Thank you!
