All Things Tax

All Things Tax

Like the title says, from the filing process and tax questions to tax policy and reform, you can search and share All Things Tax here. This is the place to find answers to all your general questions that don't fall under the other categories. And just a reminder: questions about software or online filing should be posted in DIY Products.

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Valued Pioneer
Posts: 3
Registered: ‎01-29-2017
Accepted Solution

Tax deductions for a business not started yet

Hi!

I 've been wanting to start up my own video production making webseries and animation on youtube. I do not have an LLC yet or a trademark which I want to achieve this year because I plan to pursue oher ventures including this under the LLC. Last year I did not make any income from the webseries nd nimations becuase I have not finished any yet to post. Though I had bought some software and cloud storage to support this. Even thouch I did not make any income from this yet and do not have an LLC, can thesoftware and cloud service be a tax deduction?
Tax Pro
Posts: 5,727
Registered: ‎02-23-2016

Re: Tax deductions for a business not started yet

Hi nikkigreen85,

 

Welcome to the community.

 

What you can do is run the business as a sole proprietor and report it that way on your taxes.  You can always change it to an LLC later, and if you're the sole owner your tax return will pretty much keep being done the same way.

 

On your tax return, fill out a Schedule C (Profit or Loss from Business) using your social security number and the name of the business.  You do not need an employer number.  On a Schedule C you report your income from the business and then deduct your expenses.  Since you haven't earned anything yet you will only enter your expenses that you had and you will have a loss for 2016.  The loss will carry over to your 1040, page 1, and will be deductible against your other income.  Remember, you can deduct a maximum of $5,000 in start-up exenses.

 

When and if you become an LLC you will still file a Schedule C so long as you are the sole owner of the business.  An LLC with multiple owners is a little bit different.

 

For your business registration, in most states it is not expensive to register a sole proprietorship.  It costs $59 in my home state of Florida.

 

If you have any other questions I'll be glad to help you out.

 

Louis,

Senior Tax Advisor (Tampa, FL)

Valued Pioneer
Posts: 3
Registered: ‎01-29-2017

Re: Tax deductions for a business not started yet

Thanks for the response. I dont have a name yet for my business that I want to run under. How do I go about it if I dont have a name? Do I just run it under my own name?
Tax Pro
Posts: 5,727
Registered: ‎02-23-2016

Re: Tax deductions for a business not started yet

You're welcome.

 

Yes, you can use your own name since you don't have a business name yet.

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Valued Pioneer
Posts: 3
Registered: ‎01-29-2017

Re: Tax deductions for a business not started yet

Thank you so much!! This was very helpful!
Tax Pro
Posts: 5,727
Registered: ‎02-23-2016

Re: Tax deductions for a business not started yet

You're quite welcome.