Just Got My LLC Can I Write Off Costs To Start It Off?

• First-Year Deduction: Businesses can deduct up to $5,000 of startup costs and $5,000 of organizational costs in the first year of business.
• Phase-out: If total startup costs exceed $50,000, the $5,000 deduction is reduced dollar-for-dollar by the amount over $50,000.
• Amortization: Any startup costs exceeding the $5,000 first-year deduction must be amortized (deducted in equal installments) over a 15-year period (180 months), starting with the month the business begins operating.
• Total Costs exceeding $55,000: If startup costs exceed $55,000, no first-year deduction is allowed, and all costs must be amortized over 15 years.

Important Notes:

• Business Must Start: Startup costs are only deductible if the business actually starts operating.
• Pre-operational Expenses: Expenses incurred before the business is operational are considered startup costs; once the business is running, expenses are generally treated as regular business expenses.
• Capital Assets: Expenses for acquiring capital assets like equipment are typically depreciated under normal business deduction rules, not considered part of startup costs.
• Specific Exclusions: Certain costs, such as interest, taxes, and research and experimental expenditures, are generally not considered startup costs.
• Claiming the Deduction: The first-year deduction is reported on the business's tax return (e.g., Schedule C for sole proprietors, Form 1120 for corporations). Amortized costs are claimed in following years using Form 4562, Depreciation and Amortization.
  
  
• Consult with a Tax Professional: Navigating the complexities of startup cost deductions can be challenging. Consulting with a qualified accountant or tax advisor is highly recommended to ensure you're correctly calculating and reporting your startup costs and taking advantage of all available deductions.

 

You can write off any business operating expenses. Tools and parts are definitely operating expenses as long as you truly own the truck. If you spend enough to put you into the negative you can carry over that into the next year as well.

 

Pretty much all you need to know.
Pro tip: Find a good CPA who understands trucking.
Good luck

 

You have to get an accountant involved RIGHT NOW. This is a BS move from the state unless they are going to provide legal and financial advice.

Write offs only happen when you have revenue to use against it.

BUT an accountant - ANY good one will explain what you need to know.

 

The LLC has NOTHING to do with if you can write these expenses off, or not. So far, all you have done is increase your expenses because the tax filings necessary for the LLC usually create $750 (and UP, way up) accountants fees.

“free”, my ##*.

welcome to business, this won’t be the last time you’ll be taken for a ride.