New business, no income

[Heavymetal]

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I filed for my LLC in September 2009 and have spent the last four months purchasing equipment and getting set up (metal manufacturing). I've spent several thousand dollars but haven't had any income yet. Do I have to file for 2009? Can I write off my equipment purchases in 2010?
Thanks in advance.

[TheSofaKing]

You should still file a tax return for 2009. Although, technically it sounds like your equipment hasn't been "placed in service". If you start your business in 2010 and place your equipment in service then, then yes you can start depreciating it in 2010. And even though you made no money in 2009, you should still file a tax return and determine if there's any minimum taxes due to your state.

[Skyhawk]

Most states, and many city or county governments, have a franchise tax and/or an excise tax, and/or a personal property tax, or a net worth tax on business entities. FILE A RETURN (short year return) and avoid penalties. Capitalize start-up costs and/or organization costs, and the costs of all other assets not yet placed in service.