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Pre-Revenue Tax Obligations: MooseQuest LLC dba Raxx (TY2026)

Status: research-only. This document does NOT constitute legal or tax advice. Before filing or acting, consult a CPA (federal + Pennsylvania individual and small-business) licensed in Pennsylvania. Last updated: 2026-10-02. Sources as of that date; verify freshness.

TL;DR

A default-disregarded single-member LLC files no separate federal return; its activity goes on the owner's Form 1040 (Schedule C), and Pennsylvania mirrors that on the PA-40 (Schedule C). The central open issue is whether the business has "begun" (IRC 195 start-up costs vs. current deductions, and possibly IRC 174A for software development), which depends on launch facts the CPA must establish. One item may already be late: the PA Department of State annual report ($7, window Jan 1 to Sep 30) was due 2026-09-30.

(A) WHAT YOU ACTUALLY HAVE TO DO (ordered by urgency)

  1. PA annual report: POSSIBLY PAST DUE (due 2026-09-30, two days ago). Filing window is Jan 1 to Sep 30; fee $7; file online through the PA Business Hub (file.dos.pa.gov). Per the Department of State, administrative dissolution for non-filing does not begin until reports due in 2027 (six months after that due date), so the 2026 report appears to carry a transition grace. File now and confirm no late fee on the filing screen. Also confirm whether a 2025 report was due/filed (depends on formation date).
  2. Pull the facts the CPA needs this month (launch/"began business" facts, formation date, 2025 filing history). No deadline, but every other answer depends on them. See (C).
  3. Book the CPA before year-end (target 2026-11-30). Decisions that affect 2026 (start-up vs. operating treatment, 174A posture, estimated payments given other income, Form 5213) are cheaper to settle before 12/31.
  4. Estimated tax: Q4 installment due 2027-01-15 (Form 1040-ES), only if the CPA says other income creates a balance due. The LLC itself creates no estimate obligation at $0 revenue; W-2 withholding may already cover it.
  5. TY2026 Form 1040 with Schedule C (and Form 4562 if electing/amortizing): due 2027-04-15; PA-40 with Schedule C: due 2027-04-15. Extension to 2027-10-15 extends filing, not payment.
  6. 1099-NEC. If any single payee (e.g., an attorney) received $600+ in 2025, a 2025 Form 1099-NEC was due 2026-01-31 (past); ask the CPA about late filing. For 2026 payments the threshold is $2,000; due 2027-02-01 (Jan 31 is a Sunday). A $750 attorney payment alone does not trigger one for 2026.
  7. Housekeeping (no deadline): confirm EIN; keep business funds/records separate; start a contemporaneous profit-motive file (Q3). No FinCEN BOI report is required for a U.S. LLC (Q9).

(B) Research by question

Q1. Federal filing for a disregarded SMLLC with $0 receipts

Q2. Start-up costs vs. operating expenses (the biggest issue)

Q3. Hobby-loss / profit motive (IRC 183)

Q4. If Schedule C shows a loss

Q5. Information returns

Q6. Pennsylvania

(a) PA PIT: owner of a disregarded SMLLC reports business net profit on PA-40 Schedule C; flat rate 3.07%; no loss carryforward/carryback; no cross-class offset (Q4 sources). PA does not simply follow federal start-up/loss rules. (b) Annual report (Act 122 of 2022): applies to domestic LLCs; filing window Jan 1 to Sep 30 each year starting 2025 (decennial report repealed); $7 fee; file at the PA Business Hub (file.dos.pa.gov). Transition: administrative dissolution/cancellation for non-filers applies only to annual reports due in 2027, six months after the due date; Act 122 requires a transition period, so 2025 and 2026 reports carry no dissolution consequence. Sources: https://www.pa.gov/agencies/dos/programs/business/types-of-filings-and-registrations/annual-reports ; https://www.pa.gov/content/dam/copapwp-pagov/en/dos/resources/business/graphics/annual-reports-one-pager.pdf ; https://www.pa.gov/agencies/dos/newsroom/department-of-state-alerts-business-owners-about-new-annual-repo ; https://hub.business.pa.gov/Home/QuickAction/882A08F5-EBEF-45C0-B804-6C53638D0094 . Not verified on a .gov page: any late fee, and whether a newly formed LLC's first report is due in its formation year or the next (third-party sites cite $35 plus $15 per missed report for reinstatement; confirm). Registered agent change/notices go through DOS, not this filing. (c) Local (flag, do not assume): local earned income tax on net profits (Act 32 collectors), local business privilege/mercantile taxes, municipal business registration. Rates and rules vary by municipality and school district; a zero-revenue year may still require a return or registration. Ask CPA (municipality not looked up here). (d) Forward note: PA treats canned software, whether electronically delivered, streamed or accessed, singly or by subscription, as taxable; custom software is not; labeling something a "service" does not make it nontaxable. A Raxx subscription sold to PA customers is likely in the taxable category, to be confirmed at launch (also multi-state nexus). Not a current obligation. Sources: https://www.pa.gov/agencies/revenue/resources/tax-types-and-information/sales-use-and-hotel-occupancy-tax/canned-computer-software-digital-goods ; https://www.pa.gov/agencies/revenue/resources/tax-types-and-information/sales-use-and-hotel-occupancy-tax/digital-products . Whether Apple collects/remits tax on App Store sales is unsourced; confirm.

Q7. Estimated taxes

Q8. Deferred S-Corp election (questions, not a recommendation)

Q9. EIN, bank account, BOI

Q10. Other items; IRC 174A software costs

Options compared (2026 pre-launch costs; for CPA discussion only)

Option Cost/effort Timing Tradeoff Best-fit profile
IRC 195 start-up (election $5,000 + 180-month amortization after launch) Low Amortization starts launch month Slow recovery; PA gets no loss benefit anyway Business not yet begun; costs not 174A
Deduct software development under 174A Medium (characterization, statement) Year paid, or 60-month election Larger federal loss, NOL carryforward; no PA benefit Dev-heavy spend; CPA confirms pre-launch eligibility
Deduct as ordinary IRC 162 expenses Low Current year Requires business to have begun; audit/hobby exposure if not Only if CPA concludes business has begun
File no Schedule C for 2026 None n/a No loss claimed; records still needed Only if CPA concludes nothing deductible

Jurisdiction flags

Timing / deadlines

(C) Questions for your CPA (with facts to have in hand)

  1. Has the business "begun" for tax purposes, and as of what date? (Bring: formation date; date anyone outside you could first use the product; free-tier/beta dates; Cloudflare Access removal date; App Store release plan; first-charge plan; dated roadmap.)
  2. Are the 2026 pre-launch costs IRC 195 start-up costs, capitalized costs, or current deductions? Should we make the 195 election, and for which year? (Bring: ledger by category and date; total pre-launch spend vs. the $50,000 phase-out line.)
  3. How are LLC formation costs, registered-agent fees, trademark/IP attorney fees, and the $750 IP-assignment fee categorized for a disregarded SMLLC (not 248/709)? (Bring: invoices, engagement letters, payment dates.)
  4. Does IRC 174A allow immediate deduction of our software development costs before launch? Which costs qualify (own time, contractors, cloud dev/test, tools)? Immediate deduction vs. 60-month election? Any foreign developers? (Bring: dev vs. non-dev spend breakdown, contractor invoices and locations.)
  5. Should we file a Schedule C for 2026 if the business has not begun, and what will it show? What is the audit-risk profile? (Bring: the bookkeeper's Schedule C Summary.)
  6. Hobby-loss risk and Form 5213: is the "personal-use-only" posture a profit-motive problem, and should we file Form 5213? (Bring: business plan, projections, time logs, advisers consulted.)
  7. What other 2026 income do I have (W-2, investments, spouse)? How does the federal loss interact with it, and do at-risk/passive/461(l) limits apply ($256,000/$512,000 for 2026)? Any NOL planning? (Bring: 2025 return, 2026 YTD pay stubs, AGI.)
  8. Does PA follow the same start-up/174A treatment? Given no PA loss carryforward and no cross-class offset, does deduction timing matter for PA? (Bring: 2025 PA-40.)
  9. Which local taxes (earned income tax on net profits, business privilege/mercantile, registrations) apply for my municipality and school district, and is a zero-revenue return required? (Bring: residence municipality, school district, any local tax notices.)
  10. Is any federal 1040-ES or PA estimated payment advisable for 2026 given other income? (Bring: YTD withholding, prior-year tax and AGI.)
  11. Do any 2025 payments (including the $750 attorney fee, if paid in 2025) require late 1099-NECs? Is PA nonresident withholding/REV-1667 triggered for any payee? Are W-9s on file? (Bring: payee names, addresses, amounts, payment dates, payment method.)
  12. Did the LLC exist in 2025, was any 2025 return/Schedule C filed, and was a 2025 PA annual report required/filed? Should 2025 be amended? (Bring: formation certificate, 2025 filings.)
  13. S-Corp: at what net profit does the election pay for itself given reasonable compensation, payroll cost, PA-20S, and basis limits? When must Form 2553 be filed for a 2027 effective date? (Bring: revenue forecast, pricing, payroll quotes.)
  14. Is an EIN on file, and are vendors getting W-9s with it? Are bank/card accounts separate from personal, and is there commingling to unwind? (Bring: EIN letter, bank/card statements.)
  15. Should I begin tracking qualified research expenses now for a future R&D credit (Form 6765)? (Bring: dev time records, contractor agreements.)
  16. Sales tax readiness: PA SaaS taxability, multi-state nexus, Apple IAP collection. (Bring: launch states, pricing.)
  17. Substantiation: what documentation is needed for cloud/SaaS subscriptions paid by personal card? Is home office or mileage claimable now? (Bring: statements, home-office measurements.)

(D) VERIFY THESE PREMISES

  1. The LLC is a PA single-member LLC with NO tax election (no Form 8832, no Form 2553). If an election exists, most of this changes.
  2. Formation date, and whether the LLC existed in 2025 (affects 2025 annual report and 2025 return questions).
  3. $0 gross receipts in the year, including no App Store receipts, refunds, affiliate or interest income inside the LLC.
  4. The business has not launched to any third party; "personal-use-only" means no outside user.
  5. Owner may have W-2 or other income; filing status and spouse income unknown.
  6. The bookkeeper's ledger and Schedule C Summary are complete and reconcile to bank/card statements.
  7. Payment date of the $750 Schwartz engagement and any other payments to the same payee (2025 vs. 2026).
  8. Registered agent (Northwest) fees are paid by the LLC.
  9. No employees; no contractors on the code (or W-9s and IP assignments collected); no foreign contractors.
  10. PA annual report not yet filed for 2026 (2025 status unknown); late-fee language and first-report timing not verified on a .gov page; one DOS annual-reports URL returned 404 so DOS search-result summaries were relied upon.
  11. Municipality not looked up; local taxes unverified.
  12. Rev. Proc. 2025-32 section number and Rev. Proc. 2026-32 content came from secondary commentary; confirm on irs.gov.
  13. Items marked "unsourced" (case-law standards, trademark capitalization, Apple tax collection, Snow after 2025 rewrite) need CPA confirmation.

Sources

Before you act on this, consult a CPA licensed in Pennsylvania (and a business-formation attorney for the annual-report and BOI items).