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Level 5

LLC Start up expenses part in 2017 part in 2018

I started a sole-proprietor LLC in November 2017 and deducted some organizational expenses (state fees) in my 2017 tax return. However, I incurred more organizational fees in early 2018. Can I deduct these expenses in my 2018 report as startup costs?

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Employee Tax Expert

LLC Start up expenses part in 2017 part in 2018

 

Since you "started" your business in 2017, you can deduct your additional expenses as ordinary business expenses in 2018, not as Startup costs. 

 

Your business start date is the date you were "open for business" and ready to receive revenue, not the date you started to incur organizational expenses.  That is the tax year that you would deduct any prior Startup or Organizational Expenses.   

 

If your business start date was NOT actually in 2017, then you need to amend your 2017 tax return to remove those organizational costs and include them as Startup (Organizational costs) on your 2018 tax return instead.