Incorporate as Delaware Corp C but file losses against personal taxes?
Co-founder and I are working on an app and we incorporated as a Delaware Corp C to keep track of our costs (have been hiring contract developers) and in preparation for fundraising. We don’t have revenue, only have costs / losses so don’t owe any federal or state taxes (apart from the $450 Delaware franchise tax). We’re also not anticipating meaningful revenue in the next couple years so the loss carry-forward isn’t that helpful. However, it would be great if we could write off the costs / losses against the personal taxes (we still have full-time W2 jobs). Have folks done that and if so, how does that work? My understanding is that it would mean filing a Schedule C against our personal taxes instead of a Form 1120 business tax return. Our EIN letter indicated we should file Form 1120, so it feels a bit risky not to?
This is not something that can be done with a C Corp. All gains and losses are within the entity only.