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My wife and I have started an LLC. the LLC is run our of our house, it is a machine shop. We file our taxes joint-married. She is 51% owner I am 49% owner.

I work a day job (for now).

We have purchased equipment for the LLC, lets say $20k worth. Some is consumables (cutters, grinding disks, band saw blades) some is actual equipment. No single piece cost me more than about $3,000.

Lets say I make $100k at my day job. From what I have read, the capital equipment will be depreciated? or is it a low enough dollar amount to be a straight write off?

The lifetime of the consumables seems to put those items into a different deduction category...operating expense? We have very little organizational expenses, but I am guessing Phone bill (under the business name), website count?

To date we have done about $1,000 in business.

my questions:

  1. how do I know if the equipment (all used) gets depreciated/amortized or just written off?

  2. if it is to be depreciated/amortized: how do I determine the schedule for an older machine which is used?

  3. as a pass through, does all of the business expenses (which is equipment and which will out weigh profits this year) get deducted off our personal income tax?

  4. I have read that the my 'day job' income will determine how much benefit I can get from the LLC expenses/loss, where do I find this information?

Thank you ahead of time, and if there is a good link for this sort of information, please point me that direction. I did some searches but didn't find much about how LLC loses affect, or are related to, day job income.

  • So please correct me if I have incorrect information: 1. equipment with a life time of more than 1 year has to be depreciated, anything less than that can be a full write off...? still looking for property class, especially since its is all used – david cooperstock Oct 10 '16 at 21:24
  • in the MACRS system it appears I can group assets of the same 'class' to be depreciated as a single asset, is this something I want to do if some equipment has longer life than others? – david cooperstock Oct 10 '16 at 21:28

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