New LLC in 2023 Business in 2024

[brandatan]

My husband and I started a small business selling on Amazon. There was no income in 2023, only planning and only had expenses/startup costs. Our first sale was in March 2024. We formed an LLC, and we live in Texas. Here are some questions:

1. On the Schedule C, what would be the start/acquire date of the business? Would it be Sep 2023 when we received the LLC Certificate of Formation or March 2024 when we made our first sale.
2. Do we file a Schedule C for this business for the 2023 return or do we wait until 2024 since there was no income in 2023?
3. If we wait until 2024 to file, will we be able to deduct the startup costs incurred in 203?

[LeticiaF1]

Here are the answers to your questions:

1. The reporting requirements for a business start when the business starts its actual operations, rather than the date of incorporation. Businesses are considered to start on the day when the business officially begins providing goods or services to customers, generating revenue.  The start date for your business is March 2024.  
2. No Schedule is required to be filed for 2023.
3. Start-up expenses can be deducted on the year that your business starts.  

If you would like to see more information about Start-ups, see the TurboTax help article below:

Start-up Business Tax Tips

Start-up expenses have to be amortized with a recovery period that starts with the month the business begins to operate active trade or as a business.  See the following IRS page for more information on deducting start-up expenses. 

Here’s how businesses can deduct startup costs from their federal taxes

Feel free to reach us again if you have additional questions.  

[brandatan]

Thank you so much for your help, much appreciated!