I setup an LLC for the anticipation of selling some t-shirts online - that idea fell through and now I just want to use the LLC for my design services. In 2011 I did a few design jobs, checks all made payable to me. However I’d like to report profits and some business expenses (software, computer hardware) on the LLC for my design work under 1040 schedule C. In Ohio there is no sales tax charged for these kinds of services.
My question: Although I really didn’t plan on using this LLC I have for design work in 2011, I’d like to start using it for now on, and want use it for my 2011 tax reporting. I assume this is okay, and there is nothing wrong with this?
I assume from your post that you are the only member of your LLC. Since a single member LLC is a disregarded entity for IRS purposes, you will report the income on your Schedule C. For Federal tax purposes, it makes no difference whether you report the income and expenses as a sole proprietor or as a SMLLC.
As far as using the LLC for a different purpose that what you intended when it was formed, unless you indicated a more limited purpose when you filed your articles of incorporation, an Ohio LLC is entitled to be used for any lawful purpose. You could have organized it to operate a restaurant and then switch and use it for a consulting firm. It doesn’t matter unless it violates a more limited purpose set out in the articles of organization.
Thanks @Green Moon, I thought this was the case. Yes I am a SMLLC. Also the Article of Organization for Ohio doesn’t even make you state what the purpose of the business is for, it is optional. I’ve even seen some that write out “To engage in any lawful business …etc”
In my country, after i set up and registered my company with the government, even i do not operate business activity, i still have to pay a tax that regulated by the government with amount about USD100 per year.