Question of the Day: Managing startup expenses
Looking for tips on tax treatment of business expenses pre-revenue, pre-income...
By Bob N, July 24, 2007 — 2 CommentsI think I am in a fairly typical situation for a Web 2.0 startup. I am the sole founder and developer for my site: I’ve been working on it for the 7 months, and hope to launch a public beta by end of July. For the past 7 months, I have kept my expenses extremely low by doing all the work myself. Nevertheless, I have still accumulated certain expenses.
Now I need to know: What expenses I can deduct from my taxes?
My understanding is that in order for me to deduct my business expenses, I need to have business income. Is this correct?
As a Web 2.0 startup, it’s hard to say if I will generate revenue this year. So I could use some advise from others on how they dealt with business expenses during this pre-revenue/pre-income period, and how they handled them with regard to taxes.
I should mention that I am doing this full-time, with no other job currently, so I have no regular income. I am, however, thinking about selling some stocks so that hopefully I can get some tax relief from my business expenses.
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(7 points)
July 24, 11:07 am
Perhaps these will help?
http://smallbusiness.aol.com/manage/finance/article/_a/st…
http://www.entrepreneur.com/money/taxcenter/article178812…
http://www.startupnation.com/articles/1178/1/AT_How-to-Wr…
(0 points)
July 24, 03:07 pm
I believe we were able to amortize our startup expenses over something like 5 years. So if we spent 100k before launching, we can deduct 20k/year over 5 years.