LLC and EIN, haven't opened for business

[thendrzak]

Hello, I formed an LLC in 2020 for a contracting service business and also opened a business checking account with an EIN. However, I am still not operational. Do I need to file a tax return for the business if I haven't started offering services and have no revenue or expenses to submit?

[gloriah5200]

It depends on your type of LLC.  The methods for filing both kinds of LLC are as follows:

An LLC is formed at the state level.  You will have to check the state corporation commission or whatever office you created the LLC to see if they require to see a return or you lose the LLC license.

The default filing method for a single member LLC is to file Sch C on your personal return.

The default filing method for a multi-member LLC is to file Form 1065, as a partnership.

Didn't you have to pay for the LLC license?  Didn't that have a cost?  If so, there is one expense. If that is the case, then you did have an expense during the year and therefore should file a return.

You opened a checking account, have you written any checks?

Yes, you probably should file the 2020 return even if there is not much on it.  

Since you have an EIN, you might want to file to keep it current.  If you do not file a partnership return every year, you run the risk of IRS discontinuing your EIN.

Filing requirements for multi-member LLC's:

Limited Liability Companies (LLCs). Entities formed as limited liability companies (LLCs) that are classified as partnerships for federal income tax purposes have the same filing requirements as domestic partner-ships. 

Partnerships. Every partnership that engages in a trade or business, or has gross income, must file an information return on Form 1065, U.S. Re-turn of Partnership Income, showing its income, deductions, and other required information.

[thendrzak]

Thanks. What would I do if I already filed my joint personal taxes for 2020 thru turbo tax but didn't submit a schedule c for the business? 

[DaveF1006]

It depends on the expenses you spent this year to get your business  started. For an example, in this IRS link, it explains how you can amortize start up costs and claim expenses for the year. Since you received no income, reporting these would only reduce your taxable income if you had other income to report for your business. 

If the costs were substantial, you may wish to amend your 2020 return and report this as self-employed income (loss) to earn an opportunity to reduce your taxable income. if you decide to pursue this course, you will need to wait until mid-to late March to prepare your amendment but it may be worth it depending if you have a large amount of expenses to declare.