Yes, you are correct. You will have no federal or state income tax return filings (Form 1065 for a multi-member LLC)related to your LLC until you actually are "open for business".
For the amount of start-up costs before you started your business -
You may elect to deduct up to $5,000 of start-up costs in the year your business begins operations. The $5,000 first-year deduction limit is reduced by the amount of start-up costs exceeding $50,000. (You would include this as under business income and expenses - "Other Common Business Expenses"> "Other Miscellaneous Expenses" and enter here (as start-up costs).
Start-up costs that exceed the first-year limit of $5,000 may be amortized ratably over 15 years. The amortization period starts with the month you begin operating your active trade or business. (Include any remaining start-up cost under the asset section of business income and expenses.)
Start-up costs include amounts paid for the following:
- An analysis or survey of potential markets, products, labor supply, transportation facilities, etc.
- Advertisements for the opening of the business.
- Salaries and wages for employees who are being trained and their instructors.
- Travel and other necessary costs for securing prospective distributors, suppliers, or customers.
- Salaries and fees for executives and consultants, or for similar professional services.
For example, you began business operations July 1, 2016, had start-up costs of $35,000.
You may deduct $6,000 in 2016 (First-year limit, $5,000, plus First year's amortization, $1,000).
A full year's amortization would be $2,000 ($35,000 minus $5,000 divided by 15). Since the amortization period began July 1, 2015 (the month business operations began), the first year's amortization is one half of $2,000 or $1,000.
For the amount of business expenses after you started your business -
You will be able to expense any eligible business costs incurred after you started your business.
Please refer to this IRS link for more information about Business Expenses.
