Can dues and subscriptions expenses be deducted 100% to calculate taxable income in an LLC company?
IRS Publication 529 is the go-to document.  Without being a tax professional, I'd say if the dues and subscriptions help you in the running of your business, then they're deductible. You're on your own if you take my advice (or don't). ;)
I think I may have figured this out but if someone could double check my reasoning I'd appreciate it. So if my company makes $75000 and I decide to pay myself a $30000 salary, then the quarterly payment break down would be like this: 1040ES: Would pay income tax on non salary dividend ($45000) 941: Would pay income tax, SS, medicare on salary ($30000) (I'm the only person on payroll) So I think this answers my question in that after switching from filing as LLC to S-corp, I won't have to pay as much on 1040ES because some of it will now be covered on payroll. "-Alain Wertheimer I'm a hobbyist... Most (probably all) of those older items were sold both prior to my establishing the LLC This is a hobby of yours, this is not your business. You purchased all of these goods for your pleasure, not for their future profit. The later items that you bought after your LLC was establish served both purposes (perks of doing what you love).  How should I go about reporting this income for the items I don't have records for how much I purchased them for?  There's nothing you can do. As noted above, these items (if you were to testify in court against the IRS). ""Losses from the sale of personal-use property, such as your home or car, aren't tax deductible."" Source Do I need to indicate 100% of the income because I can't prove that I sold it at a loss? Yes, if you do not have previous records you must claim a 100% capital gain. Source Addition: As JoeTaxpayer has mentioned in the comments, the second source I posted is for stocks and bonds.  So at year begin of 2016, I started selling what I didn't need on eBay and on various forums [January - September]. Because you are not in the business of doing this, you do not need to explain the cost; but you do need to report the income as Gross Income on your 1040. Yes, if you bought a TV three years ago for a $100 and sold it for $50, the IRS would recognize you earning $50.  As these are all personal items, they can not be deducted; regardless of gain or loss. Source Later in the year 2016 (October), I started an LLC (October - December) If these are items that you did not record early in the process of your LLC, then it is reported as a 100% gain as you can not prove any business expenses or costs to acquire associated with it.  Source Refer to above answer.  Refer to above answer.  Conclusion Again, this is a income tax question that is split between business and personal use items. This is not a question of other's assessment of the value of the asset. It is solely based on the instruments of the IRS and their assessment of gains and losses from businesses. As OP does not have the necessary documents to prove otherwise, a cost basis of $0 must be assumed; thus you have a 100% gain on sale." Yes, you can do this.  I do this for my own single-member LLC, but I usually do it online instead of writing a check. Your only legal obligation is to pay quarterly estimated tax payments to the IRS. I'm assuming you are not otherwise doing anything shady. For example, that you have funds in your business account to pay any expenses that will be due soon or that you are trying to somehow pull a fast one on someone else... The short answer is no you can only deduct actual expenses. The long answer is that it would be impossible for the IRS to determine the value of your time and it would open the tax system to an enormous amount of fraud (think of being able to make up time spent or writing off time spent volunteering at a soup kitchen or any other charity). Now you can write off expenses you have involved in doing the work, equipment and supplies used to do the work along with any wages you paid an employee or contractor to do said work. "I'm assuming that you're in the US.  In that case, the answer is that it depends on how your company set up its reimbursement plan.  The IRS recognizes ""accountable"" and ""nonaccountable"" plans.  Accountable plans have to meet certain requirements.  Anything else is nonaccountable.  If you are reimbursed according to an accountable plan, this is not income and should not be reported to the IRS at all.  If you are reimbursed under a nonaccountable plan, then this is income but you might be able to get a deduction on your tax return if you itemize. Most established companies have accountable plans for normal business expenses. More detail from IRS: http://www.tax.gov/TaxabilityCertainFringeBenefits/pdf/Accountable_v_Nonaccountable_Plans_Methods_of_Reimbursing_Employees_for_Expense.pdf" You are expected to file 1099 for each person you pay $600 a year. I.e.: not a one time payment, but the total over the course of the year. Since we don't know how much and what else you paid - we cannot answer this question. The real question you're asking is that if you're treating the enterprise as a hobby, whether you're supposed to file 1099s at all. The answer to that question is yes. You should talk to your tax adviser (a EA/CPA licensed in your state) about this, and whether it is the right thing for you to do treating this as a hobby at all. "Your corporation would file a corporate income tax return on an annual basis. One single month of no revenue doesn't mean much in that annual scheme of things. Total annual revenue and total annual expenses are what impact the results. In other words, yes, your corporation can book revenues in (say) 11 of 12 months of the year but still incur expenses in all months. Many seasonal businesses operate this way and it is perfectly normal. You could even just have, say, one super-awesome month and spend money the rest of the year. Heck, you could even have zero revenue but still incur expenses—startups often work like that at first. (You'd need investment funding, personal credit, a loan, or retained earnings from earlier profitable periods to do that, of course.) As long as your corporation has a reasonable expectation of a profit and the expenses your corporation incurs are valid business expenses, then yes, you ought to be able to deduct those expenses from your revenue when figuring taxes owed, regardless of whether the expenses were incurred at the same approximate time as revenue was booked—as long as the expense wasn't the acquisition of a depreciable asset. Some things your company would buy—such as the computer in your example—would not be fully deductible in the year the expense is incurred. Depreciable property expenses are deducted over time according to a schedule for the kind of property. The amount of depreciation expense you can claim for such property each year is known as Capital Cost Allowance. A qualified professional accountant can help you understand this. One last thing: You wrote ""write off"". That is not the same as ""deduct"". However, you are forgiven, because many people say ""write off"" when they actually mean ""deduct"" (for tax purposes). ""Write off"", rather, is a different accounting term, meaning where you mark down the value of an asset (e.g. a bad loan that will never be repaid) to zero; in effect, you are recognizing it is now a worthless asset. There can be a tax benefit to a write-off, but what you are asking about are clearly expense deductions and not write-offs. They are not the same thing, and the next time you hear somebody using ""write off"" when they mean ""deduction"", please correct them." No. The equipment costs are not necessarily a direct expense. Depending on the time of purchase and type of the expenditure you may need to capitalize it and depreciate it over time. For example, if you buy a computer - you'll have to depreciate it over 5 years. Some expenditures can be expensed under Section 179 rules, but there are certain conditions to be made, including business revenue. So if your business revenue is $3K - your Sec. 179 deduction is limited to $3K even if more purchases can qualify. Not every purchase qualifies for Sec. 179 treatment, and not all the State tax rules conform to the Federal treatment. Get a professional advice from a CPA/EA licensed in your State. Your freelance income will not qualify you for the work-from-home deductions, for that you would need a T2200 form signed by your employer. But, you are allowed to be self employed as a sole-proprietorship while still being an employee of another company. If you take that route, you'll be able to write-off even more expenses than those you linked to. Things like a portion of your internet bill can be claimed, for example. But note that these deductions would only apply to offset the self-employment income, so if you're not earning very much from the freelance work, it might not be worth all the hassle. Filing taxes when self-employed is definitely more complicated, and many people will get professional tax preparation help - at least for the first time. "I have done similar software work. You do not need an LLC to write off business expenses. The income and expenses go on Schedule C of your tax return. It is easy to write off even small expenses such as travel - if you keep records. The income should be reported to you on a 1099 form, filled out by your client, not yourself.  For a financial advisor you should find one you can visit with personally and who operates as a ""fee-only"" advisor. That means they will not try to sell you something that they get a commission on. You might pay a few $hundred per visit. There are taxes that you have to pay (around 15%) due to self-employment income. These taxes are due 4 times a year and paid with an ""estimated tax"" form. See the IRS web site, and in particular schedule SE. Get yourself educated about this fast and make the estimated tax payments on time so you won't run into penalties at the end of the year." How do I account for this in the bookkeeping? Here is an example below:  This is how you would accurately depict contributions made by an owner for a business. If you would want to remove money from your company, or pay yourself back, this would be called withdrawals. It would be the inverse of the first journal entry with cash on the credit side and withdrawals on the debited side (as it is an expense).  You and your business are not the same thing. You are two different entities. This is why you are taxed as two different entities. When you (the owner) make contributions, it is considered to be the cash of the business. From here you will make these expenses against the business and not yourself.  Good luck, Per IRS regulations, if your stipend is not paying you for qualified expenses (primarily, tuition and books; explicitly not room and board or travel), it is taxable.  It doesn't require self-employment taxes (which are Medicare and FICA, normally paid in part by an employer), but it is taxable income from an income tax perspective.  You can generally deduct your books and such if you have your receipts - expenses 'required' by the institution for the coursework.  Do verify that the amount on the 1099-MISC reflects what you actually received in cash above and beyond the tuition waiver - don't assume the college did this the way you expect, or even properly.  Your bank statements should match the amount on the form. You should definitely include it in your gross income and pay taxes on it.  If you received alternate instruction, you should clarify that with the people doing the filing, and follow up with a supervisor perhaps (it's possible the volunteers helping at an event like this aren't familiar with this part of tax preparation). (Source, in addition to IRS regulations - I was my wife's tax preparer many of the years she was in her Ph.D. program.) "Its is considered a ""hobby"" income, and you should be reporting it on the 1040 as taxable income. The expenses (what you pay) are hobby expenses, and you report them on Schedule A (if you itemize). You can only deduct the hobby expenses to the extent of your hobby income, and they're subject to the 2% AGI threshold." "If it's work you'd be producing specifically for this organization, that would not be deductable. Per Publication 526, Charitable Deductions, ""You can't deduct the value of your time or services, including: … The value of income lost while you work as an unpaid volunteer for a qualified organization."" On the other hand, if you were say an author of a published book or something (not specifically written for this organization), you could donate a copy of the book and probably deduct its fair market value (or perhaps only your basis, if it's your business's inventory)." "Hobby expenses are not tax deductible.  Business expenses are, but only if it's a bona fide business.  First they look at profitability: if you reported a net profit (i.e. paid taxes) in your first 3 years, they will believe you rant on Youtube for a living.   Remember, by the time they get around to auditing you, you'll likely be well into, or through, your third year.   There is an exception for farms.  Other than that, if you lose money year after year, you better be able to show that you look, walk and quack like a business; and one with a reasonable business reason for delayed profitability.  For instance Netflix's old business model of mailing DVDs had very high fixed infrastructure expense that took years to turn profitable, but was a very sensible model.  They're fine with that.  Pets.com swandived into oblivion but they earnestly tried. They're fine with that too.  You can't mix all your activities. If you're an electrician specializing in IoT and smart homes, can you deduct a trip to the CES trade show, you bet.  Blackhat conference, arguable.  SES?  No way.  Now if you had a second business of a product-reco site which profited by ads and affiliate links, then SES would be fine to deduct from that business.  But if this second business loses money every year, it's a hobby and not deductible at all.  That person would want separate accounting books for the electrician and webmaster businesses.  That's a basic ""duck test"" of a business vs. a hobby. You need to be able to show how each business gets income and pays expense separate from every other business and your personal life.  It's a best-practice to give each business a separate checking account and checkbook. You don't need to risk tax penalties on a business-larva that may never pupate.  You can amend your taxes up to 3 years after the proper filing date.  I save my expense reciepts for each tax year, and if a business becomes justifiable, I go back and amend past years' tax forms, taking those deductions.  IRS gives me a refund check, with interest!"