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Old 03-06-2019, 06:49 PM
 
862 posts, read 499,548 times
Reputation: 138

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For example, if I form LLC (for publishing mobile apps only, one member only, myself) and open a business account.

Can I use business account for computer and smartphone? I need computer to develop apps and need smartphone to test apps, but at the meanwhile, those are common devices for normal people, there is no clear boundary for personal use and for developing apps.

What can be used with business account? Company domain cost, custom email cost, llc fee, apple store fee, home office supply, etc.

Thanks.
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Old 03-10-2019, 07:43 AM
 
4,872 posts, read 1,993,008 times
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Absolutely. You use those items to either conduct business directly, or they are ancillary costs to doing business. In addition, you should be deducting your internet and the mileage in your car. The only legit expense I would avoid is home office. Just too complicated, especially if you own your house, and it tends to be a red flag for an audit.

That being said, you have to have revenue to justify the expenditure, lest your enterprise gets deemed a hobby by the IRS instead. If you are indeed achieving revenue, then you need to be discussing this with a good accountant who understands small business.
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Old 03-10-2019, 10:17 PM
 
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
21,766 posts, read 38,834,293 times
Reputation: 22408
Sounds like you are confusing LLC (ownership entitiy) with tax / expense reporting.
https://www.nerdwallet.com/blog/smal...uccessful-llc/
Please get this straightened out.

An Accountant can help! (NEVER co-mingle funds if you are using an LLC)!!! You will lose your liability shield. (then you will need a lawyer AND an accountant!)

quickbooks, or business tutorial can help too!

Be sure to comply with local laws / reporting / payments. *They will shut your business FAST if it is out of compliance.
https://www.inc.com/howard-greenstei...ess-legal.html


SCORE and SBDC offer FREE assistance to USA small businesses.

IRS can be pretty stiff too.
https://www.irs.gov/businesses/small...iness-expenses

https://www.thebalancesmb.com/deduct...penses-3192959
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Old 03-10-2019, 10:27 PM
 
862 posts, read 499,548 times
Reputation: 138
Quote:
Originally Posted by StealthRabbit View Post
Sounds like you are confusing LLC (ownership entitiy) with tax / expense reporting.
https://www.nerdwallet.com/blog/smal...uccessful-llc/
Please get this straightened out.

An Accountant can help! (NEVER co-mingle funds if you are using an LLC)!!! You will lose your liability shield. (then you will need a lawyer AND an accountant!)

quickbooks, or business tutorial can help too!

Be sure to comply with local laws / reporting / payments. *They will shut your business FAST if it is out of compliance.
https://www.inc.com/howard-greenstei...ess-legal.html


SCORE and SBDC offer FREE assistance to USA small businesses.

IRS can be pretty stiff too.
https://www.irs.gov/businesses/small...iness-expenses

https://www.thebalancesmb.com/deduct...penses-3192959
All the information is not related to my specific questions, too general online information, I know how to search those general information too.
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Old 03-11-2019, 12:07 PM
 
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
21,766 posts, read 38,834,293 times
Reputation: 22408
Did you read completely the IRS pub?
You must segregate your business use of assets, or have separate assets.

When having separate assets, you get depreciation or 'expensed' benefit, and in many states / counties you also get to list and pay personal property taxes on these 'business' assets. Paper clips, waste baskets, computers, phones...

How long have you had an LLC?
Did the Attorney / accountant / CPA advise you that you needed / or wanted a LLC?
Is it a 'flow-through-entity' ?
or taxed as a corporation?

Have you been through your state / local DOR training? (usually free on-line or via seminar)

These are specific issues related to your business. .
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Old 03-11-2019, 06:10 PM
 
Location: USA
175 posts, read 84,351 times
Reputation: 351
Quote:
Originally Posted by Baike View Post
For example, if I form LLC (for publishing mobile apps only, one member only, myself) and open a business account.

Can I use business account for computer and smartphone? I need computer to develop apps and need smartphone to test apps, but at the meanwhile, those are common devices for normal people, there is no clear boundary for personal use and for developing apps.

What can be used with business account? Company domain cost, custom email cost, llc fee, apple store fee, home office supply, etc.

Thanks.
Yes, you may use that account to cover all business expenses.

Don't forget to request an EIN from the IRS and make a decision on tax status: C-corp, S-corp, or Schedule-C.

You don't need a CPA to get started, but you should retain one for your business returns. They can get complicated quickly.

You can form your LLC yourself with your state, but if possible, seek an attorney for assistance. It will be worth the cost.

There's a dirty list of things you'll need to know, like: getting a local license (or state), DOR accounts and reporting, DOL accounts and reporting, etc...

Local resources can save you a lot of time and expense later.

Good luck!!
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Old 03-11-2019, 06:43 PM
 
862 posts, read 499,548 times
Reputation: 138
Quote:
Originally Posted by SE1SG View Post
Yes, you may use that account to cover all business expenses.

Don't forget to request an EIN from the IRS and make a decision on tax status: C-corp, S-corp, or Schedule-C.

You don't need a CPA to get started, but you should retain one for your business returns. They can get complicated quickly.

You can form your LLC yourself with your state, but if possible, seek an attorney for assistance. It will be worth the cost.

There's a dirty list of things you'll need to know, like: getting a local license (or state), DOR accounts and reporting, DOL accounts and reporting, etc...

Local resources can save you a lot of time and expense later.

Good luck!!
I am planning to form LLC, have not started yet. Of course I know I can use the business account to cover all business expense, but my question is very specific, what can be counted as business expense.

LLC is just about App development and website development, on my spare time.

I have come up a few things(below) and please let me know which can be deducted from LLC (therefore I will put those spending under business bank account), and if there are anything else I have not covered. Maybe some questions are silly, but I would like to ask and be as clearly as I can.

1) Home office: Without LLC, I also need an office for my job anyway(I occasionally telework), but most of time, the office will be used for developing apps/websites. If I don't develop app/websites, then the office will be empty.

2) Internet fee/Office Supplies: I will ignore office supply, since the spending will be almost zero. But how about internet fee, without LLC, I need internet too, however, developing apps/websites also uses internet.

3) Computer devices: Without LLC, most people have personal laptop/smartphone anyway. But with LLC, I definitely will need more devices and better devices. For example, I have been using Window PC and android phones all the time, never had Apple PC/iPhone, but in order to publish Apple Store app, I have to buy some Apple device, such as Mac. At the meanwhile, in order to better develop app, I need better/more powerful computer, not like before (just a few hundred laptop for home entertainment, watching videos, etc). So can computer devices be deducted from LLC spending? Most devices will be for both personal use and LLC use.

4) Food: How about food? If spending weekends and weekday nights developing app, developer needs to eat, right? Can I deduct some food spending?

5) Annual LLC registration fee, business ad cost, company website domain annual fee, company customer email account monthly fee, Apple Store developer annual fee: I believe those are exclusive for LLC, and can be spent under business bank account, correct?

6) During the initial phase of LLC, if the business deduction is more than business income, will the business lost be deducted from my personal income (I have full time job W2 too).

7) In general, as app/website developer, what else can spent on business bank account (deducted as business spending)?
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Old 03-11-2019, 07:19 PM
 
Location: USA
175 posts, read 84,351 times
Reputation: 351
Yes, everything used for the business is an expense. Everything.

If your business is a loss the first year, you may be able to 'carry forward' parts of that loss (consult your CPA).

You can expense EVERYTHING related to the business, EXCEPT APPLE PRODUCTS..... just kidding. lol.
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Old 03-11-2019, 07:41 PM
 
Location: Western Washington
8,401 posts, read 8,030,626 times
Reputation: 14709
Quote:
Originally Posted by Baike View Post
I am planning to form LLC, have not started yet. Of course I know I can use the business account to cover all business expense, but my question is very specific, what can be counted as business expense.

LLC is just about App development and website development, on my spare time.

I have come up a few things(below) and please let me know which can be deducted from LLC (therefore I will put those spending under business bank account), and if there are anything else I have not covered. Maybe some questions are silly, but I would like to ask and be as clearly as I can.

1) Home office: Without LLC, I also need an office for my job anyway(I occasionally telework), but most of time, the office will be used for developing apps/websites. If I don't develop app/websites, then the office will be empty.
Home offices are only deductible if the space is used solely for your business, and cannot be commingled with your personal use. It is typically best if it is a dedicated room. Recent changes simplify the deduction to allow a $5 deduction per square foot, up to a max of $1500. Fair warning, this is typically viewed as a red flag for audits.

Quote:
2) Internet fee/Office Supplies: I will ignore office supply, since the spending will be almost zero. But how about internet fee, without LLC, I need internet too, however, developing apps/websites also uses internet.
Because you use the Internet for personal expenses, it is not deductible. Office supplies are, but they are negligible.

Quote:
3) Computer devices: Without LLC, most people have personal laptop/smartphone anyway. But with LLC, I definitely will need more devices and better devices. For example, I have been using Window PC and android phones all the time, never had Apple PC/iPhone, but in order to publish Apple Store app, I have to buy some Apple device, such as Mac. At the meanwhile, in order to better develop app, I need better/more powerful computer, not like before (just a few hundred laptop for home entertainment, watching videos, etc). So can computer devices be deducted from LLC spending? Most devices will be for both personal use and LLC use.
As with #2, if they are dedicated they. An be deducted.

Quote:
4) Food: How about food? If spending weekends and weekday nights developing app, developer needs to eat, right? Can I deduct some food spending?
If you purchase food for entertaining clients, 50% of the cost is deductible. If you order a pizza for yourself while coding apps, not deductible.

Quote:
5) Annual LLC registration fee, business ad cost, company website domain annual fee, company customer email account monthly fee, Apple Store developer annual fee: I believe those are exclusive for LLC, and can be spent under business bank account, correct?
Yes, definitely deductible.

Quote:
6) During the initial phase of LLC, if the business deduction is more than business income, will the business lost be deducted from my personal income (I have full time job W2 too).
Yes. LLCs are passthrough tax entities, so you must file your losses and profits on your personal taxes. As a very rough rule of thumb, the IRS will not care if you show a couple of years of losses. Every additional year of losses increases your chance of an audit, and if they find you have been running the business solely as a hobby to deduct those expenses, you may have to pay back taxes on all of your income.


Quote:
7) In general, as app/website developer, what else can spent on business bank account (deducted as business spending)?
What are you spending on your company that you would not spend otherwise? That is what you can deduct.

Final word of advice, talk to a real accountant. Then deduct those accounting consultation fees.
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Old 03-11-2019, 08:36 PM
 
Location: USA
175 posts, read 84,351 times
Reputation: 351
Quote:
Because you use the Internet for personal expenses, it is not deductible. Office supplies are, but they are negligib
Not quite. Your LLC is perfectly capable of obtaining a cable, TV, comcast, communications, phone, etc types of accounts and paying for them. How your businesses manage those accounts is up to the share holders or management.
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