Do I need to file taxes if my LLC made no money and nor did I personally?

My response is assuming you are a single member LLC taxed as a sole proprietor. If so, then as you are registered in CA you need to pay the franchise tax even if you did not generate any profit.

Regarding federal filing, many businesses at start-up phase generate losses. As long as you have adequate documentation of the valid business expenses i.e receipts etc, you can claim this as a valid business deduction.

Specific to software business, you have not indicated if you develop software or if your business is just consulting.

If software development, then there is a separate tax treatment and guidance provided on purchase and resale of software vs internally development software ( can be amortized up to 60 months). There are few conditions as software gets outdated over 2/3 years, so ensure you consult a CPA who specializes in the Software industry.

In short, you will file Schedule C along with your individual taxes and the business expenses can be a deduction.


** Our response to a question posted on quora

Posted In: Tax

Go Back