New Federal Requirement: Starting January 1, 2024, most business entities in the US will need to report Beneficial Ownership Information.
Hi,
I am starting a new landscaping business which I intended to solely own before agreeing to a partnership with my buddy. I had picked a name & licensed myself as a sole proprietorship prior to him&I partnering up, but was told by our friend/bookkeeper an LLC is the better option & since we had decided to change the name anyway I decided to start over & get re-licensed as an LLC. We performed about $1400 worth of work in May that we want to bill out on 5/31 in order to get paid immediately by our client (property mgmt co’s policy) but have yet to obtain the LLC license. Will it matter if we have billing on 5/31 but start the business & fiscal year in June or should we keep the fiscal year in May & can you do that if the LLC isn’t formed until June? Confused here, your help is appreciated. Thanks! -Bre
Breanne,
This question should be best directed to your accountant. In general, one can elect the taxable year to be any 12 month period including time before the formation of the company. For example a taxable year can be Jan 1 to Dec 31 and it would include all revenue in that year, including revenue before the formation date of the company.
Good luck with your business and don’t forget to execute an operating agreement with your partner. You should use an attorney to draft and/or review the operating agreement.
Please note that according to IRS Circular 230 to ensure compliance with requirements imposed by the IRS, we inform you that any tax advice contained in this writing was not intended or written to be used, and cannot be used, for the purpose of (i) avoiding tax-related penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any matters addressed herein.
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