How to write off your startup costs

From the Microsoft Small Business Site.

Once you open your business and start generating revenues, you can write off many of those initial startup costs at tax time.

But there is bad news too. The rules for taking advantage of these deductions are not as straightforward as they are for your business’s ongoing expenses.

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By Joseph Anthony
One of the basic financial principals of being in business today is this: Your revenues can be offset against your expenses… Sure, some expenses, like meals and entertainment, may be only partially deductible. Other expenses may have to be written off, or “depreciated,” over a period of years. But the basic fundamental concept — revenues justifying expenses — is still pretty easy to understand and explain.

But what about those expenses you rack up before your business even opens its doors?

There is good news here, and it has nothing to do with saving money on car insurance. Once you open your business and start generating revenues, you can write off many of those initial startup costs at tax time.

But there is bad news too. The rules for taking advantage of these deductions are not as straightforward as they are for your business’s ongoing expenses.

Here are six steps to getting deductions for your pre-opening business costs.

1.
Track your startup costs. Begin at the beginning. Before you start your business, you’re more than likely to have a certain amount of startup expenses. [Read the entire article]

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How to write off your startup costs

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