Hi,
I have a question about when to deduct startup expenses, in the year incurred or year reimbursed. The entity is a multi-member LLC formed 9/2024 using cash basis accounting. The startup & organization expenses, incurred before the official start-date for the business, they were paid by members (in 2024) and now the expenses were reimbursed in 2025. The expenses are under $5k thus do not need to be amortized.
If the expenses had been incurred & reimbursed in 2024 I know these startup expenses would all be deducted on the 2024 Form 1065. But the LLC reimbursed in 2025, and since the LLC uses cash accounting, reimbursements processed in 2025 would normally be included on Form 1065 for 2025.
I am using TurboTax Business 2024. When I entered startup expenses, incurred 6/1/2024 and paid 2/1/2025, TurboTax includes them on the 2024 Form 1065.
Or since the LLC paid the expenses 2/1/2025, should I just mark them as operational expenses instead of startup expenses? the amount is under $5k, so the tax implications are identical.
thank you
