Writing off expenses: LLC -vs- C-Corp -vs- Non-Profit edition
April 5, 2014 6:56 PM   Subscribe

I'm planning on starting both a nonprofit and a business (LLC or C-Corp) before the end of summer, and I'm uncertain as to my ability to write off expenses. Each would be run with a small (<5) group of investors/friends.

Certain costs would be start-up related (computers, printers, etc), while others would be ongoing (paper, rent, internet connection), while the rest would be random (air travel costs, taking a client/board member/donor out to dinner and drinks, etc).

Some questions:

1. Can I even do this within an LLC or would the costs just be deducted from my own personal taxes based on what I paid.

2. Nonprofit - Is this even possible? Can you "write off" things as a non-profit? Are there very specific items that can and can't be written off? (Assuming I have no grant / fed / state funding sources).

3. C-Corp: I'm fairly certain I can write off almost anything directly related to my business within a C-Corp. Am I wrong?
posted by NYC-BB to Work & Money (4 answers total) 1 user marked this as a favorite
Response by poster: PS - This would be in Pennsylvania.
posted by NYC-BB at 6:57 PM on April 5, 2014

You should talk to a competent accountant licensed in Pennsylvania. Don't take tax advice from strangers on the internet.

What you're talking about is probably not complicated or unusual, and a good accountant will know the answers to many of your questions and be happy to help you set up your business. You will pay him or her for this service, but it will be some of the best money you've spent.
posted by gauche at 7:23 PM on April 5, 2014 [4 favorites]

No start up costs are deductible until the business gets off the ground. Form of business doesn't change that (c corp, s corp, LLC, DBA, doesn't matter). If a 501c3, the start up costs can be deducted immediately, bearing in mind that you'd have to get exemption from the feds. If a new nonprof, exemption would be retroactive back to the date of filing
posted by jpe at 7:30 PM on April 5, 2014

re: the nonprofit question, "writing off" deductions has no meaning in the nonprofit world. If you are a 501c3 the organization is not going to be paying taxes, so there's nothing to deduct. if you mean, can you write off the donation of the funds that you use to start the nonprofit (from your pocket or from someone else's), that's something else. If I donate to your 501c3 (for which you have an IRS determination of your tax exemption), I may be able to deduct that amount from my income taxes.

Long story short, tax expert time.
posted by BillMcMurdo at 7:54 PM on April 5, 2014

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