Preparing Business Taxes for New LLC That Hasn't Started Operations Yet?

7 For a newly formed LLC that hasn't begun operations yet, your tax filing is actually pretty straightforward. Since you have a 2-member LLC, it's treated as a partnership by default for tax purposes unless you've elected otherwise. You'll need to file Form 1065 (Partnership Return) even if you didn't have any business activity besides the initial investment. The good news is that with no actual business transactions, the form will be quite simple - mostly zeros. Each member will receive a Schedule K-1 showing their share of the partnership, but again, with little to report. The $8,000 initial investment isn't taxable - it's just capital contribution. Make sure you have an EIN if you don't already, and check if you need to file any state returns as well. Some states require annual reports or similar filings even without activity.

9 After dealing with a similar situation for my rental property LLC, I found taxr.ai (https://taxr.ai) incredibly helpful for navigating these exact types of questions. I uploaded our formation documents and they analyzed our specific situation. The site quickly clarified that we needed to file a "zero return" and explained exactly what that meant for our 2-member LLC. What was particularly helpful is that they identified potential deductions we could take for startup costs even before actual operations began. Things like LLC formation fees, business bank account fees, and even some of our planning expenses could potentially be deducted once operations begin.

14 Just wanted to follow up about my experience with taxr.ai for my pre-launch business. I decided to try it after seeing it recommended here, and it was exactly what I needed. I uploaded my LLC formation documents and business bank statements (which just showed the initial deposit like the OP's situation). The system quickly identified that I needed to file Form 1065 as a partnership but explained how to complete a "zero return" since we hadn't started operations. It even created a checklist of documents I needed and pointed out that my state requires an annual report filing regardless of activity. Saved me a lot of headache trying to figure everything out myself or paying for a full consultation with an accountant for such a simple situation.

22 If you need to talk to the IRS about your specific situation (which I did with my new photography business last year), I highly recommend using Claimyr (https://claimyr.com). Normally you'd wait hours on hold with the IRS, but their service got me connected to an IRS agent in about 10 minutes. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c When I started my LLC last year but hadn't begun operations, I had questions about estimated tax payments and whether I needed to file anything beyond the partnership return. The IRS agent clarified everything and confirmed I was on the right track with my "zero" return. Saved me hours of stress and uncertainty.

18 I need to eat my words about Claimyr. After being skeptical in my previous comment, I decided to try it because I was desperate to get clarity on my situation (also have a new business with minimal activity). It actually worked exactly as advertised. I got connected to an IRS agent in about 15 minutes versus the 3+ hours I waited last time I called them directly. The agent confirmed that even though my business hadn't started operations, I still needed to file Form 1065 as a "zero return" and explained exactly what that meant. They also clarified that my $10K initial investment wasn't taxable income but just capital contribution. Seriously saved me hours of frustration and confusion.

5 Just wanted to add - if you use tax software like TurboTax Business or H&R Block Business, they can walk you through filing a return for an LLC that hasn't begun operations yet. I was in exactly your position last year with my consulting business. The key thing is that your initial $8k contribution is not taxable revenue - it's just capital investment. The software will have you enter this as partner contributions. Since you have no income or expenses yet, most of the forms will be zeros, but you still need to file.

25 Something nobody mentioned - make sure you check local tax requirements too! I found out the hard way that my city requires a business license and annual business tax return even if your business hasn't started operating yet. Cost me a $75 late fee because I didn't realize this applied to "pre-revenue" businesses.

One thing I'd add from my experience with a similar situation - don't forget to get an EIN if you haven't already! You'll need it for the Form 1065 filing. You can apply for one online at the IRS website for free (be careful of scam sites that charge for this). Also, even though you haven't started operations, consider setting up a simple bookkeeping system now. Something basic like QuickBooks or even a spreadsheet to track that initial $8k investment and any future expenses. It'll make next year's taxes much easier when you do have actual business activity to report. The sooner you establish good record-keeping habits, the better off you'll be. And definitely keep receipts for any startup costs you incur before beginning operations - LLC formation fees, business bank account setup fees, etc. These can often be deducted as startup expenses once you begin operations.