Paying Taxes

(Missouri)

I just formed my LLC in September of this year. I have yet to make a profit due to still trying to purchase necessary equipment, etc. Next year, if I have still yet to make a profit, what do I do in terms of filing my taxes for the LLC?

Answer

I'm assuming that your LLC is not taxed as a corporation.

In that case, you are going to report a loss for your LLC for this year, and take a deduction on your 1040.

Next year, if you make a profit, that profit will flow through to your 1040 and increase your taxable income.

My suggestion is that you:

1. Keep track of all your business revenue and expenses--this includes keeping all your receipts.

2. Enter this data into Quickbooks.

3. Get a copy of TurboTax
and use it to do your personal/business tax return. TurboTax has edition specifically designed for both single member LLCs and multi-member LLCs (look under "Home and Business").