How far back can you claim business deductions for LLC expenses from previous years?

This is actually a common question for new business owners! Yes, you generally can still claim those 2022 expenses on your 2023 return, but there are some important details to understand. Business start-up costs can be capitalized and amortized (spread out) over 15 years, with the option to deduct up to $5,000 in the first year of business operation. The expenses you're describing sound like equipment purchases, which would be handled through depreciation on Form 4562. Since your business didn't have a "first year of operation" in 2022 (no income), 2023 would actually be considered your first year of active business. This means you can claim these expenses on your 2023 return even though you paid for them in 2022. You'll need to keep excellent documentation of these purchases though!

Just wanted to share something that saved me tons of time figuring out business deductions. I used https://taxr.ai when I was in a similar situation with my photography business. I had expenses from one year but didn't start making money until the next year. The system analyzed all my receipts and business documents, then showed me exactly which expenses could be claimed as start-up costs versus equipment depreciation. It even gave me a breakdown of which forms I needed to file and how to properly document everything for the IRS. Made the whole process way less stressful than when I tried figuring it out myself.

Just wanted to follow up about my experience with taxr.ai after I asked about the home office deduction. I was genuinely surprised at how helpful it was! The system actually flagged that I'd been calculating my home office percentage incorrectly (I was using total house square footage instead of the actual rooms I used). It also showed me several business startup expenses from 2021 that I could still claim on my 2023 return that I had completely forgotten about. The documentation analysis saved me from missing about $3,200 in legitimate deductions. What was really helpful was that it explained exactly why each deduction was valid and how to document it properly in case of an audit. Definitely more thorough than what my previous tax preparer did!

If you're struggling to get answers from the IRS about startup expenses, I feel your pain! I spent 3 weeks trying to call them for clarification about my business equipment depreciation. Finally used https://claimyr.com and it was seriously life-changing. They got me connected to an actual IRS agent in about 20 minutes when I'd been trying for days. The agent walked me through exactly how to handle my situation with expenses from a prior year. You can see a demo of how it works here: https://youtu.be/_kiP6q8DX5c - basically they navigate the IRS phone tree for you and call you when they have an agent on the line. Saved me hours of frustration and hold music!

Ok I need to eat some humble pie here. After my skeptical comment I decided to try Claimyr myself since I've been trying to reach someone at the IRS about my business deductions for literally MONTHS. Got connected to an IRS agent in about 25 minutes after trying unsuccessfully for weeks. The agent confirmed that I could indeed claim my startup expenses from late 2021 on my 2022 return since that's when my business actually started generating income. They also walked me through how to properly document everything and which forms to use. I'm genuinely shocked it worked so well. Apologies for being so cynical before - sometimes things actually do what they claim!

Something important to consider here - did you actually organize your LLC in 2022 with your state? If you did but didn't do any business, you might still be required to file a return showing zero income. Some states require annual reports/returns even with no activity. Also, be careful about mixing tax years. If you're trying to deduct 2022 expenses on a 2023 return, make sure you're properly categorizing them as either startup costs that can be amortized or capital expenses that need to be depreciated.

Has anyone used QuickBooks for tracking startup expenses carried over to the next year? I'm in a similar situation with my online shop. Spent about $9k on inventory and equipment in 2023 but only made like $800. Wondering if I should try to claim everything in 2023 or push some to 2024.

Great question Ryan! I went through something very similar with my consulting business. The key thing to understand is that the IRS looks at when your business actually began "active operations" rather than just when you formed the LLC. Since you didn't generate any income in 2022, your business wasn't considered actively operating yet. This means 2023 would be your first year of active business operations, so you can absolutely claim those 2022 expenses on your 2023 return. For the $12,500 in equipment and trailer, you'll likely need to depreciate these over several years using Form 4562 rather than deducting the full amount in one year. The specific depreciation schedule depends on the type of equipment, but most business equipment falls under the MACRS system. One important tip: make sure you have solid documentation for all those 2022 purchases - receipts, bank statements, etc. The IRS will want to see proof of when you bought everything and that it was purchased for business use. Also consider whether any of these qualify for Section 179 deduction, which lets you deduct the full cost of certain equipment in the first year rather than depreciating it. You might want to consult with a tax professional for your specific situation, especially given the dollar amounts involved!

Ryan, I'm dealing with a very similar situation right now! I formed my marketing consulting LLC in December 2022 and spent about $8,000 on a laptop, software licenses, and office furniture, but didn't land my first client until March 2023. What I learned from my CPA is that since your business didn't have any activity in 2022, you're absolutely right that 2023 is considered your first year of operations. The good news is you can still claim those 2022 expenses, but you need to be strategic about how you do it. For equipment like your trailer, you'll want to look into bonus depreciation rules - you might be able to deduct 80% of the cost in 2023 (it was 100% in previous years but is phasing down). The remaining 20% would be depreciated over the normal schedule. One thing that caught me off guard was that I also needed to file a late 2022 return showing the LLC formation even with zero income. It wasn't required, but my CPA said it creates a cleaner paper trail for the IRS and makes it easier to justify carrying those expenses forward. Just something to consider! Make sure you have all your receipts organized by date and keep notes about when you actually started using each piece of equipment for business purposes. The IRS loves documentation!

Ryan, I just went through almost the exact same situation with my LLC! I started mine in October 2022 and bought about $15,000 in equipment but didn't make a penny until early 2023. Here's what I learned after consulting with a tax pro: You can definitely claim those 2022 expenses on your 2023 return since that's when your business actually became active. The IRS considers "active operations" to begin when you start generating income or actively pursuing customers, not when you file paperwork. For your $12,500 in equipment, you'll have a few options: 1. Use Section 179 to deduct the full amount in 2023 (up to $1.16M limit) 2. Take advantage of 80% bonus depreciation for 2023 3. Depreciate normally over several years using MACRS I ended up going with bonus depreciation which let me deduct 80% immediately and spread the remaining 20% over the normal schedule. Saved me a ton in taxes for 2023. One tip: definitely keep detailed records showing when you purchased everything and when you actually started using it for business. I created a simple spreadsheet with purchase dates, business use start dates, and photos of receipts. The documentation really matters if you ever get audited. Also consider whether you want to file an amended 2022 return showing zero income just to establish the business existence - my accountant said it's not required but can help create a cleaner paper trail. No penalties since there's no tax owed.