I am part of a 2 member LLC. Both myself and my business partner worked this year at other jobs and each made less than 10k.
My partner and I started the business(a ladies lingerie store)- owe 10k in credit card bills from startup costs, pay 700 a month in rent- with utilities our monthly expenses are around 1000.
We have only sold about 250 to 300 a month in product since our August opening- so basically the entire first year was a loss.
My question for you is how will this effect our personal tax liability?
I called the IRS and they said I do not need to file a business tax return since there is no profit, however they said myself and my partner need to include the information about the loss in each of our personal tax returns.
Will I get a larger refund on my personal tax return with this loss?
We have already filed our personal tax return. Last year my husband established an LLC which didnot do any business. I didn't realize we had to file an LLC with our personal tax return. Can you please advise me on what we should do now?
Have a small parttime LLC with some partners. In 2010 we took a bit more cash distributions(because prior year 2009 we took less cash distributions) than our 2010 ordinary business income. We had 9K ordinary income after expenses, but distributions on sch K was 12K. I just dont want to raise any red flags with IRS and get some timewasting audit. Is this ok and sometimes happens?