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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 14429
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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I started a business in 2012 under a LLC which I incorporated.

Resolved Question:

I started a business in 2012 under a LLC which I incorporated. I made a $18000 loss on the business that year. I have another job on which I about $70000 in the same year. When I filed my tax in 2013, I did not mention anything about the loss I sustained from my LLC business because I did not want to show any reduction on my AGI because I wanted to refinance my mortgage and I did know whant to show an income lower than the $70k on my W2 to help boost my refinicing opportunity.

I made a $6000 loss on the LLC business in 2013. Can I write off both the 2012 and 2013 loss (total of about $25k) from my 2013 income from W2 when I'm doing my tax next year? If so what forms do I need to file in addition to my 1040 and what line item on my 1040 will I show the loss.
Submitted: 11 months ago.
Category: Tax
Expert:  Megan C replied 11 months ago.

Megan C :

Thank you for your question, and thanks for using JustAnswer.com

Megan C :

How are you today?

Megan C :

Unfortunately, you can only deduct losses in the year that they were sustained.

Megan C :

So, you cannot deduction your 2012 loss in 2013.

Megan C :

However, you can amend your tax return for 2012 to show the loss, and take the benefit of a reduced income in that year.

Megan C :

You can write off the $6,000 loss in 2013.

Megan C :

I'm sorry if you expected otherwise.

Customer:

Do I need to file other forms in addition to my 1040 and if so what forms. Other than registering the company and paying federal and state payroll taxes, I have not filed any report to IRS. Do I need to file any report on the LLC finantial results or I only need to show the net result on my 1040.

Megan C :

You will show the income and expenses on your 1040 on schedule C

Customer:

I thought there was a form that one needs to file to elect to report the LCC either as a corp or not. I than I have hard something like that before.

Megan C :

No, that's if you want to be treated as a corporation. There's nothing to file if you do not want to be taxed like a corporation. I would not recommend filing as a corporation because you would not be able to use losses to offset your incoem.

Megan C :

income*

Customer:

So I only need to file that if I want to be treated as a corp. I do not need to do anything except show the result on my Sch C if I do not need to be taxed as a corp. Right?

Megan C :

That is correct. The LLC is ignored for tax purposes if no election is made.

Megan C :

It's considered a "disregarded entity"

Customer:

What if the LLC is owned by more than 1 person

Megan C :

Then, it's a partnership which is also disregarded. You would file form 1065 and from that a K-1 would be generated, which would flow through to your personal income tax return as well.

Customer:

Is there a way I can select who answers my tax question when next I contact Just Answers?

Megan C :

If you would like to request me again, I can give you my personal link

Customer:

Ok that'll be fine.

Megan C :

http://www.justanswer.com/finance/expert-myvirtualcpa/

Megan C :

You can ask your question by entering it below my picture.

Customer:

Ok thanks,

Megan C :

You're welcome. Is there anything else I can assist you with tonight?

Customer:

I think that should be all. I hope my business grows then I'll need more help in future.

Megan C :

I hope your business grows as well!

Customer:

Bye

Megan C :

If you would, please take a moment to rate my response as "excellent" so that I may receive credit for assisting you today

Megan C :

The rating feature is located along the bottom of your screen

Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 14429
Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
Megan C and 5 other Tax Specialists are ready to help you
Expert:  Megan C replied 11 months ago.
Thanks, Ess for your positive rating. Please come back and visit me any time you have a tax, finance, or social security question that needs answered. It was a pleasure working with you today.
Customer: replied 11 months ago.

Thank you. You have really saved me a lot of time I would have spent researching the information you gave me today. Excellent response.

Expert:  Megan C replied 11 months ago.
Anytime, if you need anything else you have my link. Just come back and use that link. Also, in a couple of days you may receive a short survey your positive feedback on that survey would be greatly appreciated.

Thanks!

Instructor Cook

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