It is wise to claim a loss for my fist year in business?

Question

I just launched my LLC and right now have about $700 in the account, which would show a profit. I want to purchase telemarketing. Should I spend the remainder to show a loss for my first year in business?

Answer 1

Get an accountant!! Just because you have money in the bank does not mean you have made a "profit" for the year. At this point in the year your standing (as far as loss or profits) are pretty much set.

Answer 2

i can't comment on the wisdom of reporting a loss, unless it is not a true figure.
don't cook the books.
simply put, most business plans I have seen would take into accout a loss in the first year of trading, as set-up costs are quite high, a break-even in the second year as your customer base grows and a modest profit in the third. this follows a pattern of customer awareness and product integrity.
that is purely based on sole tradership though.

Answer 3

That depends on a number of different factors. If your company isn't publicly traded then it doesn't really matter what your net income turns out to be, because no one really has any reason to look at it. So for financial reasons it would probably be beneficial to go ahead and purchase the telemarketing stuff because then with the lower net income you won't have to pay as much in taxes for the year. Especially if you depreciate it at a quick pace.

Answer 4

totally up to you, if you feel that this expense will generate more income in the future then sure go ahead. But on the other hand taxes on $700 will be minimal

Answer 5

hey, show a profit this year. wait 2 weeks on the teiemarketing stuff.

Answer 6

If you have a loss, then you may claim that loss.