How far back can you claim business deductions for an LLC started last year?

You can absolutely claim those startup costs! The IRS allows you to deduct up to $5,000 in business startup expenses in your first year of business, with amounts over that threshold being amortized (spread out) over 15 years. The tricky part is determining your "first year of business" - which would be when you actually started operations, not necessarily when you formed the LLC. Since you didn't have any income in 2023, it sounds like your business truly began operations in 2024. In this case, 2024 would be considered your first year in business for tax purposes, and you can claim those 2023 expenses on your 2024 return. For the trailer and equipment specifically, those would typically be depreciated over their useful life using Section 179 or bonus depreciation, rather than being immediate startup expense deductions. The good news is you don't lose these deductions - they're just handled differently on your tax forms.

Just went through almost the exact same situation with my woodworking business. Was pulling my hair out until I found taxr.ai (https://taxr.ai) which honestly saved me so much hassle. They have this feature that analyzes your receipts and startup expenses to tell you exactly what you can deduct and when. I uploaded all my receipts from my startup phase (late 2022 for me, but I didn't have income until 2023), and it categorized everything properly and explained which tax year I could claim them in. Saved me a ton of time figuring out which items were immediate expenses vs. what needed to be depreciated. They even helped me understand how to handle the vehicle I bought partly for business use.

Ok I need to follow up on my skeptical comment. I went ahead and tried taxr.ai after posting here and... I'm actually impressed. I uploaded my receipts from when I started my Etsy shop last year and it immediately identified which expenses were startup costs vs. immediate deductions vs. depreciable assets. It actually found that I could claim about $2,300 more in deductions than I realized! Apparently I had been handling my home office and some of my equipment purchases all wrong. The interface was way easier to understand than I expected, and it explained tax concepts in plain English instead of accountant-speak. Just wanted to share since it actually turned out to be helpful for my situation which sounds similar to the original poster's.

For anyone dealing with the IRS about past year expenses, I highly recommend using Claimyr (https://claimyr.com) if you need to talk to an actual IRS agent. I spent WEEKS trying to get through on the IRS business line about a similar situation with my startup expenses, and it was impossible. Claimyr got me through to an actual human at the IRS in under 45 minutes when I had been trying for days on my own. You can see how it works in their demo video: https://youtu.be/_kiP6q8DX5c. The IRS agent I spoke with confirmed exactly how to handle my previous year startup costs and gave me specific guidance on what forms to use.

I have to admit I was completely wrong about Claimyr. After posting my skeptical comment, my frustration with the IRS reached a breaking point when I got disconnected after waiting 1.5 hours on hold. I decided to give Claimyr a shot, and I'm shocked at how well it worked. Got connected to an IRS agent in about 35 minutes, and they answered all my questions about claiming prior year expenses for my new business. The agent confirmed I could claim my 2023 startup costs on my 2024 return and explained exactly which forms I needed. Turns out I had been filling out the wrong depreciation form entirely. The $20 I spent on the service saved me potentially thousands in missed deductions. Consider me converted from skeptic to believer.

Just wanted to add that I took a slightly different approach with my consulting business startup. I actually did file a return for my LLC in the first year even though I only had expenses and no income. I filed a Schedule C showing a loss, which I was able to use to offset some of my W-2 income. If you spent $13,500 on equipment, you might have been able to use that loss against your other income in 2023. But don't worry - you haven't lost the deduction, you'll just take it in 2024 as others have explained. Just something to keep in mind for the future if you ever start another business!

One thing nobody's mentioned - make sure you have SOLID documentation for those expenses if they were from 2023 but you're claiming them in 2024. The IRS tends to flag mismatched years, especially with new businesses. Keep receipts, bank statements, credit card statements, and maybe even take photos of the equipment showing you still own and use it. Better safe than sorry!

Great question! I went through something similar with my photography business. The key thing to understand is that the IRS distinguishes between when you incur expenses and when your business actually begins operations. Since you didn't start generating income until 2024, that's when your business truly "began" for tax purposes. You can definitely claim those 2023 expenses on your 2024 return. For the equipment (mowers, trimmers, etc.), you'll likely want to look into Section 179 deduction which allows you to deduct the full cost of qualifying equipment in the year you place it in service for your business - which would be 2024 in your case. The utility trailer might be handled differently depending on its weight and use, but don't worry about losing those deductions. Just make sure you keep all your 2023 receipts and any documentation showing when you actually started operating the business in 2024. The IRS is pretty reasonable about startup situations like this as long as you have good records.