New Spouse Owned LLC- Registered Date vs Started Working Date, and other NOL questions

[CAS21]

As a first-time LLC Member, I am having trouble with my 1065 and need some guidance. First off, we are an AD military couple so we are residents of a different state than where we are stationed. I have already filed our 21 returns and received our refunds, although it was done incorrectly.

I started on TurboTax online and it didn't let me know that it filed us as a sole proprietor and not 1065 for our LLC spousal partnership. So I purchased the TurboTax Business program and need to amend (or just resubmit prior to 3/15 if I can?) I believe. Basically, do I enter my information in the TT Business program and the TT Self Employed and how should it be mapped out?

Context: I started bookkeeping, campaign finance compliance, and other freelance administrative projects while I was finishing an HR program in Jan2021. My intention was to start my own LLC once I knew it was viable as a virtual practice. From Jan-Oct I used my savings and outfitted a new office, traveled to our state of residence, Oregon, to find an in-state registered agent and meet with potential clients and investors. This went really well and I secured contracts for the 2022 campaign season so in October I registered us as an LLC partnership in OR, our state of residence. Here is a breakdown of income and expenditures:

Income: Very little as I was working to set up the LLC

Expenses: Fair amount of expenses, all paid out of pocket with no plan to reimburse ourselves as we expected an NOL.

Partnership agreement: We agreed to and stated to pass through all our expenses as UPE until we get a better footing.

Questions-  

1. When should our start date be? -When I registered us in OCT or when I started working to set up our LLC Jan?
   1. If OCT is the LLC start date, then all the asset expenditures are Equity during startup for LLC and operating expenses during start-up are UPE or Expenses for Freelance self-employment?
   2. If Jan is the LLC start-up date, Do I pass through the operating expense for the year as UPE, and Fixed assets as Equity? Or some other situation?
2. Lastly, since we have an NOL for 2021 we do not seem to be able to get the home Office Deduction. Does this seem correct, even though our Partnership Agreement is that we would personally cover all business expenses including the Business portion of the rent, utilities, etc.?

This doesn't seem correct as we converted what was our game room into an office used only for this work, upgraded our internet and phone plans, purchased all new furniture and other office expenses. I spent most of my time in 2021 in my new home office making progress on starting this LLC and getting investors and contracts for 2022. I did make some income but was mostly focused on prepping for this year.

Any guidance would be appreciated!

[AliciaP1]

First, based on the answers below and your specific situation, no, you may not need to submit a Form 1065 for 2021.  If you earned and were paid for any income for business operations prior to 12/31/21, then you will need to either file your completed Form 1065 by 3/15 or file an extension for Form 1065 prior to 3/15.

Then, for your numbered questions:

1. Your start date is the date you engaged in activities to earn income - so when you signed contracts for your services or when you first were paid for your services.  Your expenditures prior to the start date should be accumulated and capitalized as an intangible asset with specific deduction and amortization rules starting after your start date.  See Business Start-up and Organizational Costs on Publication 535 for more information.
2. With this information, you do not have an NOL for 2021 because you cannot claim deductions from income prior to earning any income.  The costs of preparing your home to provide office space for your business and all travel costs to your home state can be included in your Start-Up Costs, so you will not lose any benefit from the work you have done.  If you have earned income in 2021, then you will start the amortization of start-up costs in 2021.

[CAS21]

Thank you so very much! 

I have my start date as  July of 21 when I signed the contract.

All expenses prior to the start date for example office supplies, subscriptions like Adobe, printer ink, and the such are accumulated and capitalized as an intangible asset  ( I think of things that would be operational expenses if paid after the start date)

The expenditures for desk, chair, computer, travel for formation, meeting the potential client/investors are Recorded as Start-Up Costs and amortized starting in 2021.

Operational expenses after the start date are recorded as reg business expenses and will be listed in my P&L and Balance Sheet to be used with TT Business for form1065.

Currently, in my QB desktop  Chart of accounts, the fixed assets are listed as such and, I had originally had all the expenditures in their appropriate expense accounts. 

So should these my  next steps to prep for 1065:

1. record all transactions prior to start date elsewhere, and not in my QB, to document Start-Up Costs, formally listed fixed assets, and Intangible Asset separately  and record them in TT Business when asked
2.  Record reg business expenses and income normally, and move those costs to an equity account if paid out of pocket.
3. Record any UPE somewhere else as well and only record them in TT Business when asked about the nonreimbursable expenses.

[AliciaP1]

Yes, and I'll line out the answer again by number:

1. All costs prior to start date should be added together, and details kept in an out of QB file but added at start date to QB as an intangible asset.  The total asset value should be $5,000 less than the calculated cost as per the allowable 1st-year deduction (expense) amount and the $5,000 should be listed as an expense - you can either spread it out among categories or choose one that is most represented by the amount.  The offset for both, if both were paid for with personal funds (I'm assuming), should be to equity,
2. Yes - as you've noted
3. Yes - as you've noted

@CAS21