Hello! Coming up on filing taxes for the first time on my LLC. Couple questions:
For context I started a clothing brand:
All in all this year, when looking at my expenses, which include the cost of the machines that I purchased to create my product, as well as the supplies I needed, I spent about $20,000.
As anticipated, when I first drew out my business plan, my expenses will out way my revenue, but I’m on pace to start seeing profit next year.
Even though my business technically lost money this year, can I still claim credits on my taxes for all of my expenses?
Is there anything in particular to the first year of taxes with an LLC that I should be keeping in mind, any tips/tricks that I should consider?
Any advice is appreciated, thanks!
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Do yourself a favor and hire a business accountant
THIS 100%
I only spend about $350 bucks to do my business+personal taxes. I write down all the related costs and stuff and give it to them. It would take me HOURS to do it and I still wouldn’t feel confident.
You don’t claim credits, these are business expense deductions. That’s different than a credit.
Your business is open and making sales, right?
Are some of those expenses costs of goods to sell? Items you still hold as inventory?
Yes, still open and making sales.
The expenses I included are just the cost of the machines, equipment, and raw material needed to make the final product
Get you accountant to file your accounts. That’s their jon.
As others have said, it’s definitely worth hiring an accounting service. Check out www.prometryx.com - we’re tailored for small businesses. PM me if you want to chat about it!
Your business will be taxed based on its net income (aka profit). You should keep track of ALL deductible expenses, because it’s important to know how much money your business lost this year. In future years, when you do make a positive profit, you can offset these losses against that profit so you don’t have to pay as much tax on the profit.