Can an LLC owe...nothing?

[thepinksquid]

Originally Posted by UpperPeninsulaRon

I can only give cautionary advice to the concept of "plugging everthing into TurboTax" and figuring that everything is OK. I am even more concerned about TurboTax "deducting part of our rent". There are some pretty in depth rules about deducting home office expenses. Three hundred dollars for an accountant seems like a pretty good deal to me.

I read on the IRS website about the requirements for being able to deduct a portion of rent for our business, and it seems we qualify (we have an office and a storage area that is EXCLUSIVELY used for our business and that we'd be writing off a % of our monthly rent). However, I think in the end I may go the accountant route just to be safe...

Although we qualify, I still feel nervous about taking the deduction. One of the "red flags" I'm worried about is that technically our rent paid last night is higher than our income. The reason for this is that we had a good deal of money (~$10,000) saved in the bank that we used to pay the rent. It was kind of like our "investment" of sorts--we saved a year's worth of expenses before we started, and used about half of that. I'm worried the IRS is going to see what we paid for rent vs. how much we made and think I'm lying. I wish there was somewhere one my return I could explain this, lol. Granted, for all intents and purposes we should be fine if we get audited, because I am truthful on every single deduction (not fudging anything...as I know some do), but still, I'd rather avoid having to have that "experience" of being audited.

[WhereTheSidewalkEnds]

Originally Posted by Driller1

I never have.

Been though two audits.

Really? Interesting.

2010 will be our first year that both my husband and I are self employed. Previous to now, he has had salaried jobs during part of the year, which took care of the our paying self employment taxes.

Our accountant advised us to pay quarterly to avoid any penalties. It wasn't until she said something that I realized we had to pay social security and medicare as well. How did you get around paying that?

This will also be the first year our LLC will see a profit.

To the OP - the first year we had the LLC I tried to do our LLC taxes and didn't do them right. I didn't understand that the loss carried over to our personal taxes. I would say have your accountant do them for you. When ours redid mine from that year we got money back. $300 is a good price.

[Naptowner]

You pay self-employment tax on any profit you make from the side business. No profit - no SE tax.

Paying $300 to an accountant just for help with $1500 of side income seems like lunacy to me. Are people really struggling that much with a basic tax return?

[WhereTheSidewalkEnds]

Not having a profit would be great and was when it was solely a side business and my husband had a salaried job.

Since it is now our sole source of income, it's bringing in more money, etc., we can't avoid it unfortunately.