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My first time filing taxes for sole prop LLC!

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rsant

New Contributor
Jan 19, 2008
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New York
It will be my first time filing taxes as a sole proprietor LLC. I formed my LLC in may of 07, but have NOT YET started operating ($0.00) earnings. I anticipate the start of operation this upcoming May.

I can only account for start up costs. Depreciating assets such as hardware, e-services, furniture, supplies, materials, outsourced services, utilities.
I can't claim home office.
I am still a full time student. around 8k reported on (1098)
I also work full time. 32k a year. (w2)

Are there any tax specialists or cpa's in here that can foresee a ballpark figure on what type of returns or payments i should be expecting for this tax year as a sole prop LLC? This certainly is a new experience for me filing as a business formation.

I file with H&R every year, but this year I am trying to find a cpa that I can feel comfortable with. I get sucked in because of the cool "scratch off game" that I never win.
 

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Z5 FILMS

Contributor
Aug 13, 2007
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The Woodlands, TX
Just get a meeting with a CPA. They will have, and can fill out all the forms. You will probably just have to sign a couple forms. Don't mess with those H&R people. You are beyond them.
 

LightHouse

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schedule C, and do you mean single member LLC?
 

royemunson

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Read Millionaire Fastlane
Jul 24, 2007
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Don't go to HR - with the sch c you'll pay premiums. there is too little info to tell you what you will get back this year. i would also ask about carrying the losses forward or using them this year if possible.

Joe
 
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rsant

New Contributor
Jan 19, 2008
56
2
12
37
New York
Don't go to HR - with the sch c you'll pay premiums. there is too little info to tell you what you will get back this year. i would also ask about carrying the losses forward or using them this year if possible.

Joe
thanks everyone.

As we all have different business interests, how often do you guys do you find yourself visiting your cpa's to drop of papers, receipts and such? What beneficial habits with my cpa should I initiate?
 

PEERless

Bronze Contributor
Jan 23, 2008
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Once you become an "active" member, ask for the free copy of "Loopholes of the Rich" available to members of this forum. I just received - and finished the first read-through of - mine (thanks, Diane). She recommends a pretty regular relationship with an accountant so that you can constantly readjust your wealth-building strategy. Maybe quarterly?
 

Megan H

New Contributor
Nov 26, 2007
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Reno, NV
Hi RSant,

The problem that I see here is that you haven't started operating yet. The way the IRS looks at it, you only get to start taking those deductions when you actually open the business's doors, so to speak.

Hopefully Diane (Kennedy) will weigh in here, as the resident CPA/Tax Expert. She and I work together on a lot of business projects.

If you need a referral to a CPA who's good, trustworthy and knows his & her stuff, LMK. Diane and I both work with some great people.

Hope this helps, and sorry to be the bearer of bad news!

Megan H
 
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rsant

New Contributor
Jan 19, 2008
56
2
12
37
New York
Once you become an "active" member, ask for the free copy of "Loopholes of the Rich" available to members of this forum. I just received - and finished the first read-through of - mine (thanks, Diane). She recommends a pretty regular relationship with an accountant so that you can constantly readjust your wealth-building strategy. Maybe quarterly?
will do. thanks
 
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rsant

New Contributor
Jan 19, 2008
56
2
12
37
New York
Hi RSant,

The problem that I see here is that you haven't started operating yet. The way the IRS looks at it, you only get to start taking those deductions when you actually open the business's doors, so to speak.

Hopefully Diane (Kennedy) will weigh in here, as the resident CPA/Tax Expert. She and I work together on a lot of business projects.

If you need a referral to a CPA who's good, trustworthy and knows his & her stuff, LMK. Diane and I both work with some great people.

Hope this helps, and sorry to be the bearer of bad news!

Megan H
Megan,Yes I would really appreciate a referral. I am here in New York, would that an issue?

So basically according to what your saying, the only thing that would be taken into account for this year would be my w2, 1098, and 1099's correct?
 

Megan H

New Contributor
Nov 26, 2007
16
6
19
Reno, NV
That's the cool thing about CPAs ... if they're good, it doesn't always matter where you are. I am based in Nevada and my CPA is in Dallas! She rocks - she saves me money EVERY year.

Drop me a line at megan@taxloopholes.com with your email, etc., and I'll get you on your way.

Megan H
 

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rsant

New Contributor
Jan 19, 2008
56
2
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37
New York
Re: My first time filing taxes for sole prop LLC! - UPDATE

My cpa will be filling out my Schedule C during the week.

As we itemized I found out that I will be losing thousands of $ in deductions for the simple fact that we have not earned income. Please keep in mind that we formed LLC in May 2007 and expect to launch this coming July 2008.

We have been strictly in R&D mode and have yet to make a penny.

Since the creation of our LLC , we have made start up purchases as well as other service purchases dealing with our trade.

What can I possibly do not to miss out on these deductions?

* Deep down inside as i conversated with my cpa, it felt as if he was subliminally encouraging me to make up some type of numbers so I wouldn't lose out. He never told me anything directly to that nature, but I know he was trying to tell me something "without verbally saying it".

If i "so happen" to dig and find "income" made, what type of document should I make it in the form of? Any suggestions? How should i approach this?

Thanks
 

Diane Kennedy

Bronze Contributor
Aug 31, 2007
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The deductions aren't lost - just rolled into a year when you "start" your business.

That's the key - START. I did a thread/rant on that "The Importance of the Start" and that's exactly what is going on here. You haven't started the business, so the expenses roll over until you do.

Roll the expenses and chalk this one up to experience. Don't do something fraudulent that could come back to bite you later.
 
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rsant

New Contributor
Jan 19, 2008
56
2
12
37
New York
I had a feeling you were going to chime in with that exact response. lol

Thanks D!
 

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