What kind of expenses can be deducted from single person or partnership LLC and overall losses can be used to offset W2 income.
Can retirement contribution, car expense, home mortgage, utility bills can be used as as expense to reduce taxes. what all can be used as an expense to increase losses in LLC and offset W2 income.
Thanks in advance.
You can deduct any expenses from the income of your LLC that are related to the conduct of the LLC business. A business loss would offset W-2 income.
Q. What kind of expenses can be deducted from single person LLC?
A. You may deduct all expenses that are ordinary and necessary. For the Meaning of Ordinary and Necessary Expenses, see: http://www.cpa-connecticut.com/ordinary-and-necessary.html
Q. Can the overall LLC loss be used to offset W2 income?
A. Yes. The net loss from Schedule C goes on form 1040, where it is subtracted from other income, including W-2 income.
Q. Can a self employment retirement contribution be used as as expense to reduce taxes?
A. No, in the case of a loss. You may only make a deductible contribution to a SEP, if your business shows a profit. Reference: https://www.irs.gov/retirement-plans/retirement-plans-for-self-employed-people#:~:text=You%20can%20put%20all%20your,contribution%20or%20a%203%25%20matching
Q. Can car expense be used as as expense to reduce taxes?
A. Yes if your use of the car qualifies as a business expense. https://www.driversnote.com/irs-mileage-guide/self-employed-deductions#headline-content-1
Q. Can home mortgage & utility bills be used as as expense to reduce taxes?
A. Yes, if you qualify for the Home office deduction. https://ttlc.intuit.com/community/tax-credits-deductions/discussion/as-an-independent-contractor-i-meet-with-clients-in-their-home-however-i-complete-all-paperwork-in/00/2327908