If I registered/started a business but did not operate or make money last year (2016), is that necessary to include in my tax return ?

[Critter]

If you are a Partnership or Corporation you must file the return even if you have nothing to report ... and if you didn't file an extension for the business by 3/15/17 then you are late so get it filed asap.

[IreneS]

Good point!

[nickprp]

Thank you both for responses, I did have many startup expenses and will now be adding it for 2016. It is an LLC sole proprietorship (SMLLC)

[IreneS]

No - It is not necessary to include the business in your return.  However, you might want to in order to deduct any startup costs you may have incurred (even if there is no income).  These expenses can only be deducted in the year they were paid (for a cash basis business).

In order to report expenses, you will need to use TurboTax Self-Employed (online) or one of the TurboTax CD/Download products.

You can deduct up to $5,000 of startup costs as a current business expense.  The remainder is amortized over 180 months.

Start-up costs include:

• Survey of potential markets
• Advertising the opening of the business
  
• Consulting or other professional fees paid in connection with starting the business.
• Wages to employees being trained for the new business
• Analysis of possible facilities, labor force, supplies, etc.
• Travel and related expenses to secure distributors, suppliers and customers.

You can enter your startup expenses using these steps:

1. Click on the Business tab > Continue > I'll choose what to work on
2. On the Let’s gather your business info screen, in the Business Income and Expenses section, click the Start/Update button.  [See Screenshot #1, attached.]
3. If you have already started adding information about your business, you will see the Here's the business info we have so far screen.  Click on the Edit box next to the business.  [Screenshot #2]
4. If you haven't already started adding business information, continue through the screens to enter the needed information.
5. You will now be on the Your [XX] Business screen.  In the Business Expenses section, click on the Start/Update box next to Startup Costs.  [Screenshot #3]
6. When you are finished entering startup costs, you will be brought back to the Your [business type] Business screen.   From here you can enter other business items (income, expenses, assets, inventory, etc.).

NOTE:  If you don't see Startup costs in the list of Business Expenses you need to indicate that the business was started or acquired in 2016.  Please follow these steps:

1. Click the Start/Update box next to Business Profile.
2. Click Edit next to Acquired Business in Current Year.
3. Mark the box I started (or acquired) my business in 2016 and enter the date you started or acquired this business.
4. Click Continue and then Continue again to get back to the Your [XX] Business screen.