Tax Planning/tax


QUESTION: I have an internet magazine and I want liability protection therefore I want an LLC. My question is if for example if I get an LLC in one month can I include expenses in it from 3 months past? Also, what kinds of expenses can I include and how does that affect my personal taxes?

ANSWER: Is there a specific reason why you have chosen an LLC?  Are you aware that it places you in the highest possible effective tax bracket possible?

To answer your question, anything incurred prior to the actual start of the business must be capitalized.  However, you can write off the first $5,000 in start-up expenses and the first $5,000 in organizational expenses.  Anything above those figures must be amortized over 15 years.

I hope this helps.

---------- FOLLOW-UP ----------

QUESTION: I got the idea of LLC because all or most other online magazine are listed under an LLC so I thought there was a good reason.
1. What would give me the best tax benefits?
2. Also, what if one of my writers plagiarizes and I need some sort of protection. What is the best route?

Al - The answer to your first question "what would give me the best tax benefits" depends on a number of factors, but generally speaking, an S-corporation has the ability to provide great flexibility and opens up opportunities for greater tax benefits that either a single-member LLC or a multi-member LLC.

The answer to your second question is to check with a risk manager or insurance broker.

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As an Enrolled Agent, I am fully capable of providing tax advice as it relates to personal and business income taxes. Enrolled Agents are the only Federally licensed tax practitioners and are admitted to practice before all administrative functions of the IRS. My specialty is working with small business owners who file Schedule "C" and helping them to structure their business in such a way as to maximize as many tax advantages as possible. I also enjoy working with individuals who have both routine as well as complex tax situations. I prefer to concentrate on individuals and small business tax planning.


I have a 25 year background in financial services including tax, bookkeeping, insurance, real estate and securities. I was previously the Chief Financial Officer of a local and national franchise organization. I am currently semi-retired, but used to own (in partnership with another EA) an individual and small business financial engineering firm where I work with nearly 2,500 individuals and small business owners in nearly every state and almost every continent, assisting them in all aspects of their tax and financial well-being. I have prepared or reviewed more than 8,000 tax returns in my career.

National Association of Tax Professionals


Enrolled Agent, Admitted to Practice Before the IRS, Accredited Tax Preparer, Fellow of National Tax Practice Institute, Certified QuickBooks ProAdvisor (1999-2011), Sleeter Group Certified QuickBooks Consultant, Life & Disability Insurance Agent License (California, Texas, Maine), Real Estate Agent License (California); Many years of continuing education in all these fields.

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