Can I use my LLC as a deduction for my personal income?

Can I use my LLC as a deduction for my personal income taxes, and if so how do I?

Answer

Assuming that your LLC is taxed as a partnership or sole proprietorship, then any losses from the LLC are recorded on your personal form 1040 tax return.

These losses are deducted against your taxable income and therefore should reduce your tax liability.

If the LLC is taxed as a sole proprietorship (e.g. a single member LLC), your LLC's business income and expenses are recorded on Schedule C of your 1040. If it's a loss, you have a negative number, which brings down your overall taxable income.

You'll find the reference to Schedule C on line 12 of your 1040.

If the LLC is taxed as a partnership (e.g. a multi-member LLC), then the LLC will file a Form 1065 Partnership Tax return. Each member will be issued a Form K-1 showing the profit or loss attributable to each member.

The profit or loss from your K-1 will either increase or decrease your taxable income on your Form 1040.