LLC in 2021 for 2020 expenses

[shahzadb]

I started my business in 2020 but didn’t register LLC until today. Can I still use it on my taxes for 2020?

 

[FlyingRon]

Use what on your taxes? The LLC didn't exist in 2020, so it's irrelevant. But any business you conducted in 2020 must have its income (and likely you can deduct expenses) reported on your 2020 returns.

 

[quincy]

You should keep all of your related questions to a single thread, shahzadb. Thanks.

And please include the name of your state.

A link to one of your other threads:
https://forum.freeadvice.com/threads/day-trader-taxes.660546/

 

[Taxing Matters]

I started my business in 2020 but didn’t register LLC until today. Can I still use it on my taxes for 2020?

As the LLC was not formed until January 1, 2021 it is irrelevant to your tax situation for 2020. If you operated the business simply under your name as a sole proprietor in 2020 then you'll report the income/deductions for your business on your personal return (Form 1040) by attaching Schedules C and SE and any other related forms and schedules that apply for your business.

As for 2021, I assume that you are the only member of the LLC and that you did not elect for the LLC to be treated as a corporation. If those two assumptions are correct then for federal income tax purposes that LLC is simply ignored anyway and the business is treated as though it was a sole proprietorship. In that case, there would be no change in 2021 in how you handle your federal income tax — you'd still report the income as a sole proprietor on your Form 1040 just like you did for 2020.

In short, the single member LLC won't change anything for your federal income tax. There are good reasons for having a single member LLC, but it doesn't save you tax over operating as a sole proprietor.