Expenses for LLC

[Arian21]

My husband started an LLC for a social media business he is building. At this point, he has not made any money from it, but has had expenses to get it up and running. Are those expenses deductible and what documentation is needed if they are?

[ThomasM125]

If he is legitimately in business to the point where he is actively seeking sales or service revenue from customers or clients, he can enter the business expenses on his tax return to create a deduction. Otherwise, any expenses incurred up to the point of being actively open for business should be accumulated into a lump sum to be deducted as start up expenses in the year he is open for business. 

The documentation required would be copies of invoices supporting the deductions and proof of payment of them.

[DawnC]

You can enter operating expenses even if you do not have income yet.   

• If your LLC is a single-member LLC, you only need one product:
  •  a personal edition, TurboTax Premium if using TurboTax Online.
• If your LLC is a multi-member LLC, you will need 2 products:
  • the business product,  TurboTax Business AND 
  • a personal edition, TurboTax Premium if using TurboTax Online. 

Please see this TurboTax Article -

• If you start a business, you can deduct the cost of items you purchase, like computers and desks, as well as organizational costs to get your business started such as legal and accounting fees.
• You typically would deduct start-up costs over multiple years rather than deduct their cost in the year they’re incurred.
• For property such as desks and computers, this process is called depreciation.  For non-property expenditures such as legal fees, this process is called amortization.
• Start-up costs are typically incurred during the planning and development phase of your business.  After that, they usually become operating expenses.