topic Re: Write offs first year in Business & farm

Write offs first year

chadcombs13 — Wed, 11 Feb 2026 10:56:30 GMT

So I started an L.L.C. in mine and my wifes name,auto repair and sales,I have about $7000.00 in start up costs with no sales or service how do I get it back in money from the I.R.S. on a tax return without it being attached to my personal taxes,my wife and I file separately so I would rather it be the business tax return.

Re: Write offs first year

M-MTax — Tue, 05 Nov 2024 19:47:18 GMT

Is the LLC a single member LLC? It sounds like it's in both of your names? Do you live in a community property state? If you don't you need to file a 1065 when you're open for business for the LLC as you and your wife are members.....aka partners.....in the LLC. Form 1065 Instructions

Re: Write offs first year

M-MTax — Tue, 05 Nov 2024 19:48:16 GMT

You'll recoup your startup costs but it will be on a 1065....you and your wife will get K-1s.

Re: Write offs first year

Opus 17 — Wed, 06 Nov 2024 01:46:14 GMT

First, very important. An LLC with more than one member must file a form 1065 partnership return, which is due March 15, not April 15 (unless you get an extension) and the penalty for lateness is $195 per month per partner. The only exception is if the only two members are spouses AND you live in a community property state.

Then, you only file once the business is active and ongoing, with a profit motive. You don't need to actually have a profit or even have sales, but the business must be an active and ongoing enterprise (advertising, available to perform services, etc.) If that doesn't happen until 2025, then you would hold all your expenses to 2025 or whenever the business starts.

Then, what are your expenses?

Assets are added as business assets and depreciated over their usual life, even if they are startup costs. Other startup expenses may be deducted in the year the business opens, up to $5000. Over $5000 and part of the startup is deductible and part is amortized over 15 years. Turbotax has the formula for this.

The partnership profit and loss flows from the 1065 to your personal returns using a K-1 form issued to each partner that shows their income and expenses. If you have a net loss (net operating loss), you may be able to deduct that against other income for the year, or it may be carried forward until the business has a profit.

The K-1 from the 1065 MUST be filed with your personal tax return.

If you live in a community property state, you don't file a 1065 and K-1s, you file two schedule Cs attached to your personal return, each showing half the income and half the expenses. That's the only way.

If you want to keep the business completely off your tax return, you must make an election to have it taxed as an S-corporation. This is a complicated decision with many ramifications, and should not be done lightly or without strong, competent professional assistance.

Re: Write offs first year

M-MTax — Wed, 06 Nov 2024 04:18:48 GMT

In a community property state husband and wife members of an LLC can treat the LLC as disregarded and file two schedule Cs but that's optional.....they can also treat the LLC as a partnership and file a 1065. If they elect S corp status for the LLC they still get a K-1 along with a W-2 if they're paid a salary.