If I start my llc last half of December of 2013, and don't have to pay my quarterly taxes til April 15 2014... Can I file my 2013 taxes and still use my new llc deductions Eventhough ill only have been in business 2 weeks for 2013.... Or would it be better to wait and start Jan 1.. which works better tax wise...
2 Answers from Attorneys
It's not practical for an outsider to coach you on whether to start your new business on December 16, 2013 or January 1, 2014, or any other day. There are just too many variables including whether you want to be working at Christmastime. I merely wanted to point out that if you want to avoid an extra $800 in California franchise tax, it's really not necessary to hold off until 1/1/2014; you don't have to pay any Calif. franchise tax for 2013 if your business and the existence of your LLC begin in the last 1/2 of December 2013. There are many other factors that determine when it's best to start a new business, including the costs of accounting for a two-week year for non-Calif. tax purposes, but also when do you have the time, and when is the opportunity ripe? Don't let the tail wag the dog.
You would not be likely to get more deductions from the LLC. It is a pass-through entity. You may get the same deductons in a proprietorship. If this is why you are forming an LLC, you really need to talk to capable tax counsel. Given the extra tax return and the minimum tax, it will cost you more to operate as an LLC. You do not have liability protestion, however, in a proprietorship.
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