new young business owner! tax questions

[entrefg1preneur]

Hi guys am new to this, but just wanted to say hello and my name is Horacio, am 23 yrs young and ive always been fascinated by that run your own business thing and just recently purchased my own ice cream shop, I know it's a bad time but we sell.other stuff as well right now the sales are garbage, but I am confident I can turn it around, just had some questions the money I use to start up a business do I get that back this tax season??

[vangogh]

Welcome to the forum Horacio. You should be able to deduct most everything you spent to start up the business. As long as you spend it during the year. If the business isn't bringing much in right away, the deductions might not help all that much. It's hard to know since it depends on how much you spent and how much you'll bring in. With some things you can probably take a deduction over time as opposed to all at once. For example when I was starting my business I purchased a new computer. It wasn't a great year revenue wise so instead of deducting the whole thing, I took a portion of the computer as a deduction each year for four or fives. I forget exactly. Because I was making more in the years following, it was better to use the deduction in those years.

You might want to get started a little earlier than you usually do with taxes. You can fill everything out with all the deductions and then look into some to see if you could spread out the deduction. It'll give you a chance to play around with some numbers and then decide which is better for you.

[tallen]

Start-up costs usually have to be amortized over time, but you can deduct some start-up costs as expenses in the first year (although there is a limit). Check IRS pub 535 "Business Expenses" (http://www.irs.gov/publications/p535/index.html). They actually have a pretty good set of resources for small businesses and self-employed persons here: Small Businesses & Self Employed (http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed)

[entrefg1preneur]

Welcome to the forum Horacio. You should be able to deduct most everything you spent to start up the business. As long as you spend it during the year. If the business isn't bringing much in right away, the deductions might not help all that much. It's hard to know since it depends on how much you spent and how much you'll bring in. With some things you can probably take a deduction over time as opposed to all at once. For example when I was starting my business I purchased a new computer. It wasn't a great year revenue wise so instead of deducting the whole thing, I took a portion of the computer as a deduction each year for four or fives. I forget exactly. Because I was making more in the years following, it was better to use the deduction in those years.

You might want to get started a little earlier than you usually do with taxes. You can fill everything out with all the deductions and then look into some to see if you could spread out the deduction. It'll give you a chance to play around with some numbers and then decide which is better for you.
Okay thanks like depreciation you mean? The business isn't making much now so you recommend I depreciate the assets over time versus deducting it all at once?

[entrefg1preneur]

Okay thanks tallen appreciate the help I'll check it out.

[tallen]

Depending on the structure of your business and the nature of your income and expenses, you might not be able to deduct expenses that are greater than your revenue, so if that's the case then depreciating your start-up costs over time might be a better option.

[entrefg1preneur]

Ohh alright I get it now, makes sense thanks.

[David Hunter]

Dinuba, California?

You need to market the poop out of your ice cream business if you're worried about getting your money back for taxes!!!

[entrefg1preneur]

Yeah I was thinking that!