Starting business at end of year - tax disadvantage?

jbizplanjbizplan Posts: 1subscriber
edited November 2006 in Business Planning
Hello All,
We are in midst of starting up a business and are ready to go full steam ahead but we are having a dilemma.  We would like to get everything ready for the business to open at the beginning of the year - however how do we go about deducting all the expenses that were attributed to setting up the business ie renovations, equipment purchasing, etc., etc. if the corporation is formed and all the costs with starting up the business are done before the end of the year and no income has been generated?  Seems like I would be losing out some major deductions unless I form the business at the beginning of the new year.  Is this a correct remark?
Thank you for your time.

Comments

  • keyconkeycon Posts: 34subscriber
    Show your start when your started. Makes no difference if you have incoporated yet or not (or an LLC). You can take these deductions as a sole preprietorship on your individual tax returns (or you and your partners if you have them). Check with your accountant - I am not one nor do I play one on TV. But I have been in business for a good while and I know what I did in the beginning on several business ventures.
    Sounds to me like you will lose money this year - sometimes a good thing - helps on the tax liability. Uncle Sam knows that it takes time to start a business and also knows many businesses lose money in the early going. There is nothing wrong or illegal about losing money.
    Do you have an accountant? If not, get one. IMHO, an accountant is a very important part of any business.
    [email protected]
     keycon2006-11-18 20:36:11
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