Write Off Start-up Costs
Starting a business is expensive, but don't let it be a bigger financial burden than it has to be. Much of your start-up costs can be written off come tax time. Here's how to maximize your write off.
1) Keep track of your expenses. These include start-up costs and organizational costs. Start-up costs are the costs associated with setting up your business. They include analyzing the potential market, paying consultants, purchasing supplies, advertising and paying employees who help you before you open. Organizational costs include any expenses you incurred to organize the business, i.e., state incorporation fees and accounting and lawyers' fees.
You can write off as much as $5,000 in start-ups expenses and $5,000 in organizational costs. Other expenses can also get written off but over the course of 15 years.
2) Assets, such as equipment and furniture, can also be written off even if you initially bought it for your personal use. However, they have to be depreciated with different rules for different assets.
3) Delay start-up costs whenever possible. Once you've started your business, you'll be able to write off your expenses in the first year instead of over 15 years.