4 ms·

If my company won't be making money or revenue for quite some time, what does that mean for me in terms of the IRS? Will we get penalized for NOT having revenue

by _RPM 10y ago

If my company won't be making money or revenue for quite some time, what does that mean for me in terms of the IRS? Will we get penalized for NOT having revenue?

g10r 10y ago
In the United States you will not be penalized for having no revenue.
- snerbles 10y ago
  You are effectively penalized in California for zero revenue, see all the comments in this thread about the $800/yr minimum tax.
  - g10r 10y ago
    To clarify, I was assuming State and Federal fees not to be considered being penalized and simply cost of doing business.
- jahewson 10y ago
  Oh yes you will. In Britain a zero-revenue company cost me £14 a year, in the US it's about $200. California is worse still.
jackson23 10y ago
If a C or S corp, you still need to file a Form 1120 [1] U.S. Corporation Income Tax Return: "Who Must File Unless exempt under section 501, all domestic corporations (including corporations in bankruptcy) must file an income tax return whether or not they have taxable income. Domestic corporations must file Form 1120, unless they are required, or elect to file a special return. See Special Returns for Certain Organizations, below" LLCs have a similar requirement. [1] https://www.irs.gov/businesses/small-businesses-self-employed/corporations https://www.irs.gov/businesses/small-businesses-self-employe...
ryandrake 10y ago
It's worth pointing out that California imposes a MINIMUM tax of $800/yr on LLCs (even if you have zero revenue). This disincentives you from going and forming an LLC "just because".
- _RPM 10y ago
  This would for a corporation in Delaware.
  - ryandrake 10y ago
    The sub-title is: "How to bootstrap a Delaware C-corp (or S-corp) with employee(s) in California" If you have a 'nexus' in California, you are subject to that tax. Ask me how I came to find that out :)

4 ms·

If my company won't be making money or revenue for quite some time, what does that mean for me in terms of the IRS? Will we get penalized for NOT having revenue

by _RPM 10y ago

If my company won't be making money or revenue for quite some time, what does that mean for me in terms of the IRS? Will we get penalized for NOT having revenue?

g10r 10y ago
In the United States you will not be penalized for having no revenue.
- snerbles 10y ago
  You are effectively penalized in California for zero revenue, see all the comments in this thread about the $800/yr minimum tax.
  - g10r 10y ago
    To clarify, I was assuming State and Federal fees not to be considered being penalized and simply cost of doing business.
- jahewson 10y ago
  Oh yes you will. In Britain a zero-revenue company cost me £14 a year, in the US it's about $200. California is worse still.
jackson23 10y ago
If a C or S corp, you still need to file a Form 1120 [1] U.S. Corporation Income Tax Return: "Who Must File Unless exempt under section 501, all domestic corporations (including corporations in bankruptcy) must file an income tax return whether or not they have taxable income. Domestic corporations must file Form 1120, unless they are required, or elect to file a special return. See Special Returns for Certain Organizations, below" LLCs have a similar requirement. [1] https://www.irs.gov/businesses/small-businesses-self-employed/corporations https://www.irs.gov/businesses/small-businesses-self-employe...
ryandrake 10y ago
It's worth pointing out that California imposes a MINIMUM tax of $800/yr on LLCs (even if you have zero revenue). This disincentives you from going and forming an LLC "just because".
- _RPM 10y ago
  This would for a corporation in Delaware.
  - ryandrake 10y ago
    The sub-title is: "How to bootstrap a Delaware C-corp (or S-corp) with employee(s) in California" If you have a 'nexus' in California, you are subject to that tax. Ask me how I came to find that out :)