topic Do I need to file any tax forms if my LLC (formed in Delaware, principal address in Massachusetts) didn't make any money last year? in Business & farm

Do I need to file any tax forms if my LLC (formed in Delaware, principal address in Massachusetts) didn't make any money last year?

digitaltaxation — Thu, 11 Mar 2021 05:42:03 GMT

My LLC was formed in March 2020 and this past year I haven't made any money with it. My principal address for it is in Massachusetts. Is the only thing I need to do is pay the annual $300 Delaware tax? Do I need to file tax returns for it in Massachusetts or Federally? Thanks

Re: Do I need to file any tax forms if my LLC (formed in Delaware, principal address in Massachus...

JeffreyR77 — Thu, 11 Mar 2021 17:59:53 GMT

Yes, you have a requirement to file an annual report and pay a business entity tax online in Delaware.

ANNUAL REPORT AND PAY BUSINESS ENTITY TAX

Re: Do I need to file any tax forms if my LLC (formed in Delaware, principal address in Massachus...

JeffreyR77 — Thu, 11 Mar 2021 18:03:12 GMT

If you did not receive any revenue for the business, you do not need to file a Schedule C with your Federal or State tax returns. If you received any income (not just didn't make any profit) you have a requirement to include a Schedule C with your Federal return to report the income and you can claim expenses associated with that income. If you have a loss, it will reduce any other income you have.

Re: Do I need to file any tax forms if my LLC (formed in Delaware, principal address in Massachus...

digitaltaxation — Thu, 11 Mar 2021 19:37:53 GMT

If I didn't make any revenue, can I still deduct startup costs and loss? Thanks!

Re: Do I need to file any tax forms if my LLC (formed in Delaware, principal address in Massachus...

Irene2805 — Thu, 11 Mar 2021 19:47:07 GMT

Yes. Even though you had no income you can still prepare a Schedule C for your business (if you are a sole proprietor). You can deduct any startup costs and regular business expenses you may have incurred (even if there is no income). Startup costs can only be deducted in the year they were paid (for a cash basis business).

You can deduct up to $5,000 of startup costs as a current business expense. The remainder is amortized over 180 months.

Start-up costs include:

Survey of potential markets
Advertising the opening of the business
Consulting or other professional fees paid in connection with starting the business.
Wages to employees being trained for the new business
Analysis of possible facilities, labor force, supplies, etc.
Travel and related expenses to secure distributors, suppliers and customers.

You can enter your startup expenses using these steps:

Click on Income and Expenses and then click the Start/Revisit box in the Self-Employment section.
On the Your 2020 self-employed work summary screen, click on Edit next to your business.
On the Here's your [business] info screen, click on the box Add expenses for this work.
On the Tell us about any expenses screen, click the radio button next to the most appropriate category for this payment -- Commissions, Contract Labor, etc.
After making your selection(s), click Continue when done. TurboTax will walk you through the data entry.

Once you have finished entering your startup costs you will be brought back to the Here's your [business] info screen. Click the box Add expenses for this work, so to enter other expense categories.

NOTE: If you don't see Startup costs in the list of Business Expenses you need to indicate that the business was started or acquired in 2020. Please follow these steps:

Click the Edit box next to General Info
Click Edit next to General Info (On the again).
On the Tell us about how long you've worked in [XX] mark the box I started [business name] in 2019 and enter the date you started or acquired this business.
Click Continue and then Looks Good to get back to the Here's your [business] info screen.

Re: Do I need to file any tax forms if my LLC (formed in Delaware, principal address in Massachus...

digitaltaxation — Fri, 12 Mar 2021 05:21:20 GMT

Thank you! If I am not the sole officer/member of the LLC (the LLC consists of me and someone else), can I still file it?

Re: Do I need to file any tax forms if my LLC (formed in Delaware, principal address in Massachus...

JeffreyR77 — Sun, 14 Mar 2021 18:40:39 GMT

It depends. If your other member agrees, then you can.

You just do not want both or neither of you to do it.

If the LLC is a multimember LLC, your Federal Form 1065 is due March 15.

You can use TurboTax Business to prepare and file your tax return.

TurboTax Home and Business does not include multimember LLC tax returns.

Re: Do I need to file any tax forms if my LLC (formed in Delaware, principal address in Massachus...

digitaltaxation — Mon, 15 Mar 2021 03:41:05 GMT

Thank you, so that I understand, with no revenue/income, I would only need to file the 1065 if I want to deduct startup costs in my personal tax return?

Additionally, since I was formed in Delaware, would I just need to pay the annual report and business entity tax for Delaware for the state-level taxes? Or would I also need to pay taxes to Massachusetts? Thank you so much

Re: Do I need to file any tax forms if my LLC (formed in Delaware, principal address in Massachus...

ToddL99 — Mon, 15 Mar 2021 16:46:01 GMT

Yes, you would only need to file the 1065 if you wanted to deduct startup costs.

As @JeffreyR77 stated: You have a requirement to file an annual report and pay a business entity tax online in Delaware. See: ANNUAL REPORT AND PAY BUSINESS ENTITY TAX

Since your business is located in MA, you must file a partnership return (Form 3). From Partnerships:

A partnership must annually report the partnership's income to the Department of Revenue on a Form 3, Partnership Return of Income if:

It has a usual place of business in Massachusetts, or
Receives federal gross income of more than $100 during the taxable year.

(There is no filing threshold for income, so even if income is "0", that is what you report)