Can I Claim Expenses Before My Business Starts
Throughout my 20 years of practice, I have come across a lot of entrepreneurs who had no idea they could claim expenses even though their business had not yet started or made a sale.
When starting a new business from home, often you will find that you will be spending money before you actually “start”. Depending on your industry, you may need to buy equipment, inventory, purchase a domain name for your website, pay for website hosting, pay for marketing, pay for promotions from influencers, pay for photography, graphic design fees for your logo, money to register your LLC or Corp, network marketing start-up fees, etc., etc., etc.
Make sure you keep track, because the IRS does allow you to deduct up to $5,000 in start up and up to another $5,000 in organizational fees. Organizational expenses fall under the category such as the money you pay to set up your Corporation or your LLC, money paid to a Lawyer and other related costs. Yes, even if you have not made one dollar in sales, if you have income you earn from your job or other taxable income sources…you can still benefit by claiming these expenses on your tax returns as a first-year entrepreneur.
The whole point in claiming expenses like these, is to lower your taxable income which will ultimately put you in a lower tax bracket and therefore save you money on taxes because your tax liability will also be decreased.
Do you need help? Knowing what you are allowed to do versus what you are not allowed to do is key to navigating through this confusing world of taxes being an entrepreneur. You can find out so much more valuable information like this when you download my ebook at www.newentrepreneurtaxguide.com. And if you want more personalized guidance to get your questions answered, book a consultation with me. I remotely serve the entire U.S.so your location is not an issue. Email me at email@example.com
(Btw…there’s also still time to amend your prior-year tax returns for 2018, 2017, and 2016 to improve your numbers.)
Follow me on IG @entrepreneur_help_desk
As a Tax Strategist, Consultant and Educator, I’ve been helping other Entrepreneurs (and Individuals) around the U.S. just like you, save thousands of their hard-earned tax dollars, increased their refunds, and solve multiple tax problems. Beyond taxes, I am your “GPS” to starting and growing your own business. Be sure to download my ebook Taxes & The New (or “Early-Stage”) Entrepreneur: What You Need to Know