2023 Tax Filing for LLC Started in 2024? Can I Use Previous Expenses?

Thanks for the detailed response. If we file the Form 1065 now, can we still apply those 2023 expenses against future income in 2024? Or do we lose the ability to deduct them since they occurred in 2023? Also, if the business wasn't technically "operating" in 2023, how do we determine which expenses count as startup costs vs regular business expenses?

Expenses generally must be deducted in the year they were paid or incurred, regardless of when you earned income. If you had legitimate business expenses in 2023, they should be reported on your 2023 Form 1065, even if you had no income. These expenses would flow through to your personal return as losses. For determining startup vs. operating expenses, the key moment is when your business begins providing goods or services. Expenses before this point are typically startup costs (limited to $5,000 immediate deduction with the remainder amortized), while those after are regular business expenses. Things like research, market analysis, and formation costs before operations began would be startup expenses.

Does it help figure out how much of those special startup expenses you can deduct immediately vs having to spread out over years? My CPA keeps telling me different things about my photography business startup costs and I'm confused.

Does it actually interface with the IRS systems? I'm worried about using third-party tools that might not be compliant or secure. Also wondering if it handles state-specific LLC requirements? I'm in California and they have extra hoops to jump through.

Yes, it absolutely helps with determining the immediate deduction amount (which is usually $5,000) versus what needs to be amortized over 15 years. It clearly separates these categories and explains why each expense falls where it does, which makes it much easier to understand than just having a CPA tell you without explanation. It doesn't directly interface with IRS systems - you use the information it provides to complete your actual filings. This is actually better for security since your data isn't being transmitted to the IRS through a third party. And yes, it handles state-specific requirements including California's complicated system - it'll flag things like the $800 minimum franchise tax and other CA-specific issues.

How does this actually work? I've tried calling the IRS dozens of times and just get the "call back later" message. Is this just paying someone to sit on hold for you? Seems like that wouldn't help if they're not accepting calls in the first place.

This sounds too good to be true. The IRS doesn't give priority access to certain callers, so I don't see how this service could possibly work. Sounds like a waste of money when you could just keep trying the regular number yourself. Has anyone else actually verified this works?

It basically uses an automated system that navigates the IRS phone tree and holds your place in line. When an agent is about to pick up, you get a call and are connected immediately. It's not about priority access - it's about not having to personally sit on hold for hours. The reason it works when you get the "call back later" message is that their system keeps trying at different times until it gets through. The IRS often opens and closes their queue throughout the day based on capacity, and the Claimyr system catches those windows when they open back up, which is nearly impossible to time correctly yourself.

Thanks for this advice. Is filing Form 7004 for an extension still helpful even though I've already missed the original March deadline? And do you know if first-time penalty abatement is something I can request myself or do I need a tax professional to help with that?

Yes, filing Form 7004 is still helpful even after missing the deadline! It prevents additional penalties from accruing after the original due date. So while you'll still owe penalties for the period between March 15 and when you file the extension, you won't accumulate more penalties through September. First-time penalty abatement is something you can absolutely request yourself - you don't need a professional. After you file the late return, call the IRS business line and simply ask for "first-time penalty abatement." If you have a clean compliance history (no penalties in the past 3 years), they will often grant it over the phone. Just be polite and explain that you weren't aware of the filing requirements since this was your first year with actual business activity.

That's not entirely accurate. S-Corps save on SE taxes but they have more compliance requirements like payroll tax filings and reasonable salary documentation. Plus the OP would need to file Form 2553 to elect S-Corp status, and retroactive elections can be tricky. Not worth the headache for a small LLC that's just starting out in my opinion.