If your business operates as an llc and makes no money or looses money do you still have to file taxes and will you end up owing or you have to file regardless and you can file your business expenses for a return?  What if there are not enough funds in LLC account?


Answer

If your LLC loses money, then the loss becomes a deduction on your personal 1040 tax return.

However, in order to take this deduction, you must file a return for your LLC–either a 1065 (for multi-member), or Schedule C for disregarded single member LLCs.

Failing to file a tax return for an LLC that loses money means you are leaving a tax deduction on the table, and thereby overpaying on your taxes (or getting a smaller refund).

If there isn’t enough money, you may want to consider loaning money to the LLC from your personal account and memorialize the loan with a promissory note.

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