My wife "Started" a "business" - LLC Sole Prop. - ...
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NoSimpleAnswers
Level 1

My wife "Started" a "business" - LLC Sole Prop. - in October 2020, but no revenue till Jan 2021'.

As an LLC, she got an EIN, separate bank account, a website, and some inventory to sell online in 2020.  She didn't actively market and sell until after the January 2021 started.  So from a money perspective, her Biz has Expenses but no Revenue in CY 2020.  The expenses are about $2000 or so for her startup costs. 

We've been married for many years and she's been a Stay-Home Mom til she started her Biz, and our filing status has been MFJ every year. 

Now I have 2 questions

1. Filing:  Does she (or we) need to file Federal Taxes for her Biz for 2020?  What about State (VA)?

2. If she does need to file, do we file Jointly or separately?  Or still Jointly, with a separate Biz filing (under it's own EIN)?

 

I know the info is out there, just need a little help finding it.

Thank you;

 

2 Replies
ColeenD3
Employee Tax Expert

My wife "Started" a "business" - LLC Sole Prop. - in October 2020, but no revenue till Jan 2021'.

She is not required to file if she intends to report income on Schedule C, but she can deduct her start-up expenses. You would still file jointly, but the Schedule C would be in her name and EIN only.

 

 

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NoSimpleAnswers
Level 1

My wife "Started" a "business" - LLC Sole Prop. - in October 2020, but no revenue till Jan 2021'.

@ColeenD3- Thank you, so much!

That is very helpful.

 

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