Thursday, January 04, 2018

Starting a New Business? Here’s What You Can and Can’t Deduct

From Bplans:

If you’re planning to use your personal savings to launch a new business, you’ll be happy to hear that many of the costs you’ll incur are tax deductible.

Business startup expenses are categorized differently from standard business expenses. Distinguishing between the two depends on when the cost is incurred.

In the eyes of the IRS, you are technically in “startup phase” until you open up your doors for business, or until you start earning income from the business—whichever comes first. Your costs during this period are categorized as startup costs.

Once you have launched or made your first sale, costs are categorized as business expenses.

However, not everything can be claimed as a startup expense during the startup phase.

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