Putting up money in my new business

[Tax questions 101]

Hi there,

I started a new business this year (2022) and put some personal money into it as starting capital.

How is that starting capital considered from a tax perspective, both for my company and for me personally?

My company is an LLC 'S' Corporation with all revenues / losses being passed through to me.

Thank you in advance for your help.

[melj1]

When starting an LLC the monies you invest are your capital investment. The income and deductions flow to your individual return. If you are the only member of the LLC, then it is reported on a Schedule C on your 1040. If there are more than one member, you will need to file a form 1065 and the income and expenses will distributed based on the operating agreement. There are rules governing expenses incurred prior to starting the business that may allow for deductions of the expenses and after starting the entity there may be limits on how and when some startup expenses may be deducted. 

[Tax questions 101]

Dear melj1,

Thank you for getting back to me.

I understand what you are saying, and have a couple of follow on questions.

I started the company earlier this year and opened a business bank account a month later and put some personal funds into the account.

As per my company do I consider that as income and as per me personally is that an expense?

If it is income for the company, when I get the Schedule K and it passes to me, will I also have to pay tax on that initial capital investment as income?

Kind regards