what form to file for LLC ?

[Magic Beanz]

Hello all!
In mid 2004 I registered an LLC in California. I paid the $800 franchise tax board fee a month after registering... i didn't do any business (been busy with other stuff, but i had to register the LLC already anyway) so i dont have any income nor did i do any work for it in 2004...

SO...what am i supposed to file?
I also saw another post on this forum about someone doing Quarterly tax estimates...is that required? (was i supposed to be doing that!?)

Any help or suggestions appreciated...

Your $800 registeration fee is called "organizational Expense" and may be written-off as amortization expense over 60 months starting with the month the business begins operating. If the business did not begin operating in 2004 then you would start the deduction in the year and month that it does start operating. The deductions is taken on form 4562, page 2, bottom of the page and carried forward to the tax return that the entity reports on. If you are a single owner LLC that would be on your 1040 Sch-C tax return.

You do not have to pay estimated taxes unless you think you are going to owe more than $1,000 when you file your tax return.

[! Hulio !]

I agree with OldJack except with regard to the $800 fee. The $800 is not a registration fee (I believe you paid $70 to register the LLC in California). It is an annual tax and, as such, should be 100% deductible in the year it was incurred rather than amortized. (OldJack, please check me on this point.)

The bad thing about that pesky $800 California franchise tax is that it is payable every year, even if you generate no revenue and even if you operate at a loss.

Logic would agree with aanegelica! However, the IRS Code §195 does not agree.

I agree that if it is an annual tax, then it may not be organizational expense (Code §248) but if not it clearly would be Start-Up Costs (Code §195) as it was incurred before the business begain. Unfortunantly, Organizational Expense and Start-Up Costs incurred before 10-22-04 are captialized and amortized the same at a monthly rate over 60 months as calculated and reported on form 4562, page 2.

Originally Posted by pub 535 business expense, page 31

Qualifying costs. A start-up cost is amortiz-
able if it meets both the following tests.
-- It is a cost you could deduct if you paid or
incurred it to operate an existing active trade
or business (in the same field as the
one you entered into).
-- It is a cost you pay or incur before the day
your active trade or business begins.

[! Hulio !]

Very important distinction. Thanks for the clarification.