I spent $650 in Dec 2020 for a 1120S business that opened in Jan 2021. Should I include the transactions on my 2021 filing somehow or should I file a late 2020 return?

Thanks for dropping by here in the Community, @nothingidentifying. Allow me to share some insights about this matter.

You're unable to add a start-up cost dated way back to 2020 to the 2021 filing. You can only include the transaction the moment that you reimburse yourself.

I’ll guide you through entering the expenses and reimbursement to your LLC’s owners in QuickBooks Online (QBO).Let's start by making a journal entry to record the expenses you spent out of your own pocket for the startup costs.

You'll need to set up an expense account for the expenditures first. Also, add a bank account to which the personal monies can be reimbursed. To determine the suitable types for these two accounts, I recommend consulting your accountant. They can also assist you with journal entry creation. Make sure you're in the Accountant view instead of the Business view. Once verified, proceed with the steps below.

1. Click the +New button from the left menu.
2. Select Journal entry under Other and then set the Journal date.
3. Choose the expense account you’ve created for the costs on the first line.
4. In the Debits column, enter the amount.
5. Select Partner’s equity or Owner’s equity on the second line.
6. In the Credits column, enter the same amount.
7. Hit Save.

The last six steps are shown in the screenshot below. Simply repeat the procedure for the remaining two owners.

Second, we'll use a check or an expense to document the reimbursement. Please be sure to refund the personal cash using the bank account you set up. The process should then be repeated for the other two owners. For the detailed instructions, see Step 2  through this article: Pay for Business Expenses with Personal Funds.

Once you've completed this, you'll be able to pay and file your taxes with the appropriate agencies. Visit this page for additional details: Tax Basics For Limited Liability Companies (LLCs).

It's a good business practice to maintain business and personal costs separate. However, there may be situations when it is required. With this in mind, I recommend reading the following article for further information: Mixing Business and Personal Funds Overview. Also, you can click the two links to help you pay for personal expenses from a business account and reimburse an employee.

Let me know if you have any additional QuickBooks related concern. I'm just a few clicks away. Keep safe and stay hydrated.

The transactions were already pulled into QuickBooks from the business's credit cards, categorized, paid for funds from the business bank account, and reconciled. To further clarify, these expenses were not paid for with personal funds.

The issue is that the transactions happened at the end of December 2020. ie: Before the timeline, the IRS is expecting to see only 2021 expenses.

Hi @nothingidentifying, I'll share details about your expenses.

In QuickBooks Online, we're only able to help record your transactions as stated by my colleague above. With regards to the inclusion of the said expenses for your tax return, it's best to contact the IRS for instructions.

I also recommend contacting your accountant for guidance. They can also share the best accounting practice to follow considering the needs of your business in closing your books.

Use the following links below if you haven't found someone you can work with:

• Federal Payroll Tax Compliance for Internal Revenue Service
• The QuickBooks Certified ProAdvisor

I'm adding this reference for tips and guides to utilize in preparation for the coming year-end: Complete Certain Tasks in QuickBooks Online to Prepare for the New Fiscal or Calendar Year.

Don't hesitate to post a reply below if you have other questions or concerns with expense. I'm always around happy to help. Take care and stay safe!