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Subject Author Date
Start-up bussines tax/accounting questions... dickens 01-12-2007
Posted by dickens on January 12, 2007, 7:12 am
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 My partners and I started a business midyear '06. The
business is not operational and still in the planning stage.
We have incurred minimal expenses thus far:

5/26/2006         11.18        Godaddy (Annual Domain Name Fee +
2 months of server space/DB access)
07/14/2006 48.51 NOLO LLC Book
07/27/2006 188.99 Turnkey Web Tools
07/26/2007 3.99 Godaddy (Server Space charge)
08/05/2006 47.72 Best Software Accounting
08/09/2006 44.98 1 & 1 Internet (3 Mo.)
08/23/2006 203.86 Windows XP Pro (2 Copies)
08/30/2006 5.00 Google Book
09/21/2006 45.00 Registered Agent Fee
10/30/2006 120.00 Certificate Of Formation Fee
11/08/2006 44.98 1 & 1 Internet (3 Mo.)

764.21 Total

Us three partners have each incurred 1/3 of the cost equally.

Questions:

1.) How would I classify/post these expenses for internal
accounting purposes?

2.) Does the business have to file a tax return even though
we are not operational? The business is registered in
Deleware as LLC.

3.) Do these expenses incurred trickle down to our personal
tax returns and reduce our taxable income?

Thanks,

Joe

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<< that may be imposed upon the taxpayer. >>
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Posted by Benjamin Yazersky CPA on January 13, 2007, 2:31 am
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> My partners and I started a business midyear '06. The
> business is not operational and still in the planning stage.
> We have incurred minimal expenses thus far:
>
> 5/26/2006 11.18 Godaddy (Annual Domain Name Fee +
> 2 months of server space/DB access)
> 07/14/2006 48.51 NOLO LLC Book
> 07/27/2006 188.99 Turnkey Web Tools
> 07/26/2007 3.99 Godaddy (Server Space charge)
> 08/05/2006 47.72 Best Software Accounting
> 08/09/2006 44.98 1 & 1 Internet (3 Mo.)
> 08/23/2006 203.86 Windows XP Pro (2 Copies)
> 08/30/2006 5.00 Google Book
> 09/21/2006 45.00 Registered Agent Fee
> 10/30/2006 120.00 Certificate Of Formation Fee
> 11/08/2006 44.98 1 & 1 Internet (3 Mo.)
>
> 764.21 Total
>
> Us three partners have each incurred 1/3 of the cost equally.
>
> Questions:
>
> 1.) How would I classify/post these expenses for internal
> accounting purposes?
>
> 2.) Does the business have to file a tax return even though
> we are not operational? The business is registered in
> Deleware as LLC.
>
> 3.) Do these expenses incurred trickle down to our personal
> tax returns and reduce our taxable income?

generally, start up expenses are required to be capitalized
& amortized

___________________________________
<<< Benjamin Yazersky, CPA [NJ & NY] >>>
-----> real address on hobokeni or hobokenx <-----

<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>

Posted by Harlan Lunsford on January 13, 2007, 2:31 am
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dickens wrote:

> My partners and I started a business midyear '06. The
> business is not operational and still in the planning stage.
> We have incurred minimal expenses thus far:
>
> 05/26/2006 11.18 Godaddy (Annual Domain Name Fee +
> 2 months of server space/DB access)
> 07/14/2006 48.51 NOLO LLC Book
> 07/27/2006 188.99 Turnkey Web Tools
> 07/26/2007 3.99 Godaddy (Server Space charge)
> 08/05/2006 47.72 Best Software Accounting
> 08/09/2006 44.98 1 & 1 Internet (3 Mo.)
> 08/23/2006 203.86 Windows XP Pro (2 Copies)
> 08/30/2006 5.00 Google Book
> 09/21/2006 45.00 Registered Agent Fee
> 10/30/2006 120.00 Certificate Of Formation Fee
> 11/08/2006 44.98 1 & 1 Internet (3 Mo.)
>
> 764.21 Total
>
> Us three partners have each incurred 1/3 of the cost equally.
>
> Questions:
>
> 1.) How would I classify/post these expenses for internal
> accounting purposes?
>
> 2.) Does the business have to file a tax return even though
> we are not operational? The business is registered in
> Deleware as LLC.
>
> 3.) Do these expenses incurred trickle down to our personal
> tax returns and reduce our taxable income?

Easy answer. Until you are in business, you have no
deductions. So there's no "trickling" down to personal
returns.

Now, are you fellow actualy IN Delaware? If not, why on
earth did you form an LLC there? If in another state,
you'll still have to register with that state you know.

ChEAr$,
Harlan Lunsford, EA n LA

<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>

Posted by Harlan Lunsford on January 15, 2007, 1:48 am
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dickens wrote:

> My partners and I started a business midyear '06. The
> business is not operational and still in the planning stage.
> We have incurred minimal expenses thus far:
>
> 05/26/2006 11.18 Godaddy (Annual Domain Name Fee +
> 2 months of server space/DB access)
> 07/14/2006 48.51 NOLO LLC Book
> 07/27/2006 188.99 Turnkey Web Tools
> 07/26/2007 3.99 Godaddy (Server Space charge)
> 08/05/2006 47.72 Best Software Accounting
> 08/09/2006 44.98 1 & 1 Internet (3 Mo.)
> 08/23/2006 203.86 Windows XP Pro (2 Copies)
> 08/30/2006 5.00 Google Book
> 09/21/2006 45.00 Registered Agent Fee
> 10/30/2006 120.00 Certificate Of Formation Fee
> 11/08/2006 44.98 1 & 1 Internet (3 Mo.)
>
> 764.21 Total
>
> Us three partners have each incurred 1/3 of the cost equally.
>
> Questions:
>
> 1.) How would I classify/post these expenses for internal
> accounting purposes?
>
> 2.) Does the business have to file a tax return even though
> we are not operational? The business is registered in
> Deleware as LLC.
>
> 3.) Do these expenses incurred trickle down to our personal
> tax returns and reduce our taxable income?

Easy answer. Until you are in business, you have no
deductions. So there's no "trickling" down to personal
returns.

Now, are you fellows actually IN Delaware? If not, why on
earth did you form an LLC there? If in another state,
you'll still have to register with that state you know.

ChEAr$,
Harlan Lunsford, EA n LA

<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>

Posted by dickens on January 19, 2007, 1:39 am
Please log in for more thread options
Harlan Lunsford wrote:
> dickens wrote:

>> My partners and I started a business midyear '06. The
>> business is not operational and still in the planning stage.
>> We have incurred minimal expenses thus far:
>>
>> 05/26/2006 11.18 Godaddy (Annual Domain Name Fee +
>> 2 months of server space/DB access)
>> 07/14/2006 48.51 NOLO LLC Book
>> 07/27/2006 188.99 Turnkey Web Tools
>> 07/26/2007 3.99 Godaddy (Server Space charge)
>> 08/05/2006 47.72 Best Software Accounting
>> 08/09/2006 44.98 1 & 1 Internet (3 Mo.)
>> 08/23/2006 203.86 Windows XP Pro (2 Copies)
>> 08/30/2006 5.00 Google Book
>> 09/21/2006 45.00 Registered Agent Fee
>> 10/30/2006 120.00 Certificate Of Formation Fee
>> 11/08/2006 44.98 1 & 1 Internet (3 Mo.)
>>
>> 764.21 Total
>>
>> Us three partners have each incurred 1/3 of the cost equally.
>>
>> Questions:
>>
>> 1.) How would I classify/post these expenses for internal
>> accounting purposes?
>>
>> 2.) Does the business have to file a tax return even though
>> we are not operational? The business is registered in
>> Deleware as LLC.
>>
>> 3.) Do these expenses incurred trickle down to our personal
>> tax returns and reduce our taxable income?

> Easy answer. Until you are in business, you have no
> deductions. So there's no "trickling" down to personal
> returns.

Once we become operational would the $$ we spent in '06 for
planning, etc... be duductible on our personal returns?

> Now, are you fellows actually IN Delaware? If not, why on
> earth did you form an LLC there? If in another state,
> you'll still have to register with that state you know.

No we are not located in Delaware. We just originally
registered our LLC there. We were thinking long term and if
the business is successful we were going to relocate HQ to
Delaware. I do realize that I'll have to apply as a foreign
entity to the state we currently operate out of. If we
decide not to move the business to DE, then we'll dissolve
the LLC in that state and primarily register with MO.

<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>

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