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TaxTip about StartUp Expenses that you can Deduct |
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Category: Business Strategies Current Grade: A- Total Views: 925 Member Comments: 0 |
Posted on: 04/11/2008 Posted by: TReXGlobal Blog Points: 490 View all blogs >> |
| Start-up expenses are costs incurred while creating a business or for investigating the creation of an active trade. This includes expenses incurred when acquiring an existing activity.
Business start-up expenses are usually capitalized, but you can elect to deduct up to $5K of business start-up costs right away. A start-up cost can be amortized if it is an expense that you could normally deduct if it was incurred while operating your existing trade or business, or if it is a cost you pay or incur before the day your business begins. |
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Keep in mind that certain expenses must be amortized over 5 years, like legal expenses and expenses for setting up the business structure (LLC, etc...) I hope this explanation was easy to understand and that it can be helpful for you or your clients. To learn more about startup expenses that can be deducted from your Schedule E, take a look at these tips.
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