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Lev
Lev, Tax Preparer
Category: Finance
Satisfied Customers: 29775
Experience:  Personal Investment, Tax Preparation
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I opened a LLC in Illinois because I wanted to start a

Customer Question

I opened a LLC in Illinois because I wanted to start a business but the business had no income. I have opened an account a a credit card in the name of the business to start building credit (I want to apply for a business loan in the future) but the business has had zero income. What I have to file taxes? Does this affect my personal income taxes (I am using Turbo Tax and they are asking me if I opened a business in 2015). Please advise.I live in MA now is that makes a difference at all.Thank you!
Submitted: 1 year ago.
Category: Finance
Expert:  Lev replied 1 year ago.

If your did not have ANY business transaction - and the business has NOT actually started - you will answer NO on that question - and would not need to to report anything on your tax return.
There will not be any affect on your personal tax return.

Customer: replied 1 year ago.
When can you claim a loss?
Expert:  Lev replied 1 year ago.

what kind of loss are you going to claim?
did you have any business related expenses?

Customer: replied 1 year ago.
I have paid someone to design a website so I can get business.
Expert:  Lev replied 1 year ago.

These are all startup expenses - they are NOT deducted unless the business started.
All startup expenses must be capitalized.

If you NEVER start the business - how to handle costs depends on your specific situation.

For instance

- if you are searching for a general business possibility without any specific business in mind - the costs are considered as personal costs and are not deductible.

- if the costs are to start a specific business - these are “investment expenses” and may be deducted on schedule A as investment expenses.

- If you purchased any business assets - the cost of such assets is a capital expense and you can claim it as capital loss when you dispose these assets.

Please be aware that if you paid someone in teh course of your business - and that amount is above $600 - that payment must be reported on form 1099misc.