@Introspective Introvert wrote:
Wow, thank you so much for providing so many amazing resources! 🙂 I truly appreciate it. The tax professional I spoke with said I could file my 2021/2022 taxes together because my home state's laws but I definitely plan on getting every thing sorted out soon.
No no no. What? I've never heard that for a state, I could be uninformed.
But your federal 2021 tax return must only list income and expenses for 2021, and your federal 2022 return must only list your 2022 income and expenses.
Now, you may be misinterpreting something. If you form a business in 2021 but are not actively engaged in business activities and have no income, then you don't report anything for 2021. Your startup costs are reported as expenses in 2022, sometimes as direct expenses, and sometimes amortized or depreciated, depending on the nature of the expense. However, if you were actively engaged in business activities in 2021 (advertising for clients, signing contracts, starting work) then you must report that on your 2021 tax return even if you weren't paid for your work until 2022. You would have a loss for 2021 that you would carry forward to offset your income in 2022, but if you have business activity and expenses (other than startup expenses), you have to report the expenses and business activity on a 2021 return.
