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    3 Replies Latest reply on Apr 15, 2010 11:22 AM by DomainDiva

    Should I File Taxes For My Start-Up Business?

    azdolfan Newbie
      I'm attempting to put some websites together to hopefully make some
      money that I started last year. I have had a LLC registered for many
      years that I didn't do anything with. Last year I finally started my
      plan and mostly all my start-up money went out for hosting, domain
      purchases (about 1k), website development, bought a printer, upgraded
      failing computer, etc. The only income that was made was about $20 from
      google adsense. I also have two business accounts I opened last year
      that I deposited about $50 in each and they require me to use the card
      every month or a fee is assessed (which I use to buy dollar items only
      like a soda). I had to make a couple deposits in those bank accounts
      again, when the money was getting low, but that was out of my own pocket
      and not by money made from the websites.

      1) Do I have to file taxes for 2009? Adsense didn't payout since I
      didn't accrue $100 (and still hasn't today) and/or because my bank could
      report me since that was just opened last year?

      2) If I don't for either of the reason above, should I still file?
      Would my loss help benefit any gain I might have in 2010 to help
      offset? I know stocks do that for a year or two, but I have no clue
      about small businesses. My loss or start-up costs are in the range of
      $3k. My "unofficial" earnings is $20 from adsense, not paid.

      3) Should I get some type of tax form from Google Adsense and the Bank?
      I received neither. I got from my bank for my personal savings
      account, but not for my LLC business accounts.

      4) Lastly, I asked my dad these questions and he mentioned that his wife
      was audited right after she claimed a loss because of selling make-up
      for the first time that year. Said they followed her financial
      extensively after that. He didn't think it was worth it. Is it true,
      that if I filed I would draw a red flag and they may audit me and also
      dig into my personal financial affairs (not just the business)?

      Thanks so much for any help! ;)
        • Re: Should I File Taxes For My Start-Up Business?
          snccigars Adventurer
          I know this may not be the answer you are looking for here, but I am sure most people will tell you the same thing: talk to an accountant or a tax professional. They will give you the answers that will cover your rear should the IRS come knocking.
            • Re: Should I File Taxes For My Start-Up Business?
              azdolfan Newbie
              I understand what your saying, but if I didn't even need to file then why go to a CPA that I really can't afford it right now. Hence, trying to get direction on here. I will definitely get a CPA when things get going more, but it still is in development stage and not even live for the most part. I was told on another forum that I probably didn't need to file because at this point the IRS may look at my "business" as a hobby
              rather than a business. The endeavor must be engaged in to make a
              profit. If still in the startup phase I do not file a return and may not
              deduct any expenses incurred.

              ... 90,00.html
              <!-- m -->

              And, .....Any expenses incurred prior to opening for business and seeking to
              generate income are considered startup expenses and must be amortized
              over 15 years once the business is open and in operation. In the first
              year of operation you can deduct up to $5,000 of startup expenses and
              $5,000 of organization expenses, however, but you must be open for
              business, meaning you are seeking to generate revenue.

              My only question I'm waiting on is...
              If I make a profit, I still will be able to claim over 15 years
              amortized, but if I never make a profit, then the start-up costs are
              not able to be used. Correct? So should I consider putting them on my personal return this year?

              Anyone have any feedback on that? Thanks