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Do you files taxes for an LLC if you havent made any $$$ yet?

by lurky
9 replies
HI im getting a web business going, Im going to create an llc, even though there is no apparent liability, Ive read that you should do this to protect personal assets.
I'll be the single owner of the llc and the state is ct.
IF the business doesnt make any month this year, will i still have to file taxes?
And if so is it a simple procedure? can i still use personal tax software and do it myself? Or is it a big deal.
Thx
#$$$ #files #llc #made #taxes
  • Profile picture of the author Regional Warrior
    Lurky delete one of the threads you have 2 on the board or you may get done for spamming

    Jason
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  • Profile picture of the author irawr
    Banned
    Originally Posted by lurky View Post

    HI im getting a web business going, Im going to create an llc, even though there is no apparent liability, Ive read that you should do this to protect personal assets.
    I'll be the single owner of the llc and the state is ct.
    IF the business doesnt make any month this year, will i still have to file taxes?
    And if so is it a simple procedure? can i still use personal tax software and do it myself? Or is it a big deal.
    Thx
    Yes you absolutely should create an LLC. It takes awhile to go through the process, so if you want to avoid filing for this year, wait 2-3 weeks and then file to incorporate. You could wait until the first of the year but you won't have your LLC until mid-late January, possibly early February.

    I would just get an accountant for taxes.

    I've been legally threatened 3 times now over the years for various nonsense, I had to go to court once and my attorney actually recommended I settle with them because they only wanted a one time settlement and I was adequately resistive, so they asked for a pretty low settlement under a non-disclosure agreement.

    As much as I wanted to fight them, it was easier and cheaper to pay them and wash my hands of it. Which is what they wanted, but they certainly did not get the amount they were looking for (or even close.) There's also a chance I would have lost and I'm not sure what I would have done, my company would have been forced to start selling assets as it did not have that much cash.
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  • Profile picture of the author JC Web
    First, I am not a tax professional and you certainly should consult one for any tax questions instead of relying on this forum.

    My understanding is that a sole proprietor LLC is only required to file a schedule C if you earn more than $400. This is filed on your personal income tax return as your personal income. An exception would be if you choose to be taxed as a corporation. Your state may have different requirement and taxes. In California we have to pay a yearly $800 franchise tax regardless of and in addition to income tax.

    Now, you may want to file even though you don't make any revenue or profit in order to make future use of deductions and losses. Again, you can consult a tax professional if reading the IRS documentation is too confusing to you.
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    • Profile picture of the author irawr
      Banned
      Originally Posted by JC Web View Post

      In California we have to pay a yearly $800 franchise tax regardless of and in addition to income tax.
      Wow, haha, glad I'm not in CA. What a crock of ....

      Originally Posted by JC Web View Post

      Again, you can consult a tax professional if reading the IRS documentation is too confusing to you.
      It's too confusing even for most tax professionals...
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      • Profile picture of the author JC Web
        Originally Posted by irawr View Post

        Wow, haha, glad I'm not in CA. What a crock of ....
        Yes, at one point I had 3 LLCs but I was only actively using one to make money. Between the franchise tax and local business taxes and fees I was paying over $1000 each for those non-operative LLCs, so I dissolved the 2 I wasn't using and just have the one now. Even if you lose money, you have to pay it for each LLC. I have ridiculous local tax fees as well and California state income taxes are quite high (for those that file as a sole proprietor LLC). I love living here or I would move to one of those no tax states.
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        • Profile picture of the author irawr
          Banned
          Originally Posted by JC Web View Post

          Yes, at one point I had 3 LLCs but I was only actively using one to make money. Between the franchise tax and local business taxes and fees I was paying over $1000 each for those non-operative LLCs, so I dissolved the 2 I wasn't using and just have the one now. Even if you lose money, you have to pay it for each LLC. I have ridiculous local tax fees as well and California state income taxes are quite high (for those that file as a sole proprietor LLC). I love living here or I would move to one of those no tax states.
          I would not have paid, I would have the LLC declare bankruptcy and tell them to have fun getting "their money." Maybe not the best idea, not sure how the laws work out there obviously
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  • Profile picture of the author lurky
    Thanks all... BTW did you use a service to help set up that LLC? lke legalzoon? Any recommendations?
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    • Profile picture of the author JC Web
      Originally Posted by lurky View Post

      Thanks all... BTW did you use a service to help set up that LLC? lke legalzoon? Any recommendations?
      I did mine myself but I'm that type of person. I do my own taxes too and a lot of people aren't cut for that. An LLC is not as complicated as a Corporation and I didn't find it difficult. But even if you do it yourself, you may want to find a local lawyer who will give you a free consultation to make sure you are aware of local and state responsibilities and implications of your business formation.

      Go to your state government website and find out what is required of you. If you get confused about what any of it means or you have questions or it just seems overwhelming, then you should seek out assistance to make sure you do everything right.

      Many people do use legalzoom to file and there's nothing wrong with that, but I personally suggest finding a local lawyer with a good reputation in these matters to handle it if you don't do it yourself. That's for two reasons. One, there can be local laws and requirements that legalzoom may not be familiar with. Two, it gives you a human being you can go to talk to in person with questions or if you have any legal actions to deal with. If you have any legal problems, you're going to want to find a lawyer anyway, so better to have one you are already working with.
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      • Profile picture of the author Jill Carpenter
        Just go get an accountant.

        (If you live in/near Fairfield county, I'll be happy to share my local one there with you)
        Signature

        "May I have ten thousand marbles, please?"

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