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Fremont, California

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TaxTip about StartUp Expenses that you can Deduct

Posted at Property Management Software by Niman Singh

Apr. 11, 2008

Categorized in: Property Management Software

Tagged with: startup expenses, tax tips

Starred by: 1 Member

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.

Common start-up expenses include:

• Accounting fees
• Analysis, survey, or study
• Advertisements for the opening of the business.
• Office equipment and furniture
• Salaries and wages for employees who are being trained and their instructors.
• Travel and other necessary costs for securing prospective distributors, suppliers, or customers.
• Salaries and fees for executives and consultants, or for similar professional services

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.