i have just formed my llc i have not invested any capital yet to fund the llc. Although i have been buying things like software programs,office supplies, gas for vehicle to look at properties etc.etc. can i write these expences off on my personal tax return? my llc is a two person llc and will be taxed as a partnership. thanks for the help
slow down!
LLC is a business entity - watch your cash flow management.
you start running up the gas bill on “trips to look at real estate” and the next thing you know you’ll be maxing out CC’s saying, “it’s a business expense.”
not good.
talk to your CPA.
“writing these expenses off…”
certain things you buy for the LLC will be depreciated over time, or your accountant can make certain elections for you and deduct certain expenses in different ways.
and don’t reduce yourself to just expenses - look into the “phantom cash flow” of business deductions.
you must document where you travel, log miles and begin keeping track of your mileage which is used for business related travel.
that’s a HUGE deduction. again, your CPA can help you take advantage of this simple deduction.
there are others which you can learn about also, basics from Nolo - “Deduct It” latest edition - FROM THE LIBRARY FOR FREE!!
slow down and stop going crazy purchasing all this stuff - just my two sense.
good luck!
yes. all business expenses are deductible.
however, you should avoid comingling.
either loan the company cash (with a promissory note, interest, payments, the whole deal) and let the company pay for things
or
pay them personally and submit an expense report to the company for reimbursement. even if the company has no cash, it can still take the deductions and hold the “accounts payable” to you until it has cash to repay you.
what you should avoid, however, is paying company bills with personal money and then deducting them on the business tax return and/or paying personal bills from the company checkbook. the company is a completely seperate entity from you personally. treat it like you are an employee of someone else’s company.
My husband and I have a rehab we are working on right now…we have an S corp., however the mortgage on the house is in my name…we are paying for all of the rehab costs with the company money. When I make my first payment on the mortgage, does it need to come from my own personal account? I was planning on paying all expenses for the rehab, including the mortgage with our company money. Would that be considered commingling? I’m confused…any advise or comments?
pay the mortgage from the company.
next time, ask your mortgage co to title and finance directly to the entity.
first time posting…cool site
can anyone recommend a lender that is more flexible in providing loans on properties owned in entities? i am not sure why banks are so rigid on this one? they still can foreclose, they still have 1st lein position?
it has been posted here before that banks are not the way to go, and i concur (as you can tell by my user name).
Easier said than done, most traditiional banks or mortgage companies will not title or finance directly to an LLC
that is the case with my husband and I…we had to have the mortgage in one of our names…we could not get it in our company name.
then you need a new lender. a good lender who understands real estate investment can and will finance directly to an LLC, although it usually requires a personal guarantee.
however, you won’t find this at your local “bank”. they only know how to “fill in the blanks”. you need a real estate lender.
if you can’t find one, email me offline and I’ll refer you to mine.
thanks