You can writeoff up to $5,000 in startup costs and anything over that must be amortized over 15 years. If I incur these costs, can I write this off on my personal income taxes or do I have to establish the business first, wait to generate revenue and then write off under the business taxes?
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In the US, it depends on your business structure. Partnerships and LLCs taxed as partnerships can write off business expenses on their personal income taxes. This is because business profits and losses are passed through to the owner. In fact this is the only way to do this for these business structures. C Corps and LLCs taxed as corporations cannot deduct business expenses on personal income taxes. That being said, you must have a registered business before you can do this. You cannot deduct business expenses from a business that does not exist yet. |
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My understanding is that you can only write off something if A) Its under a business B) There is revenue from the business Write off is an expense concept. In the states it goes with the concept of income and income is revenue minus expenses. Most taxes are calculated on income generated in a company. Some taxes though are not. |
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