Hey guys, I read recently that you can writeoff startup costs from: Business Startup Costs: Write Off!
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Let's say I hire a programmer to write a website for me and pay $5,000. If I then register the business as an LLC, can I write that 5,000 from my personal taxes or only from the taxes that the website incurs?
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- Take an upfront deduction if you qualify - OK, so you've tracked all [COLOR=#cc3533! important][COLOR=#cc3533! important]your [COLOR=#cc3533! important]business[/COLOR][/COLOR][/COLOR] startup costs before opening shop. Now comes the good part: You can write off up to $5,000 in business startup costs and another $5,000 in organizational expenses in the year that you start a business. (Note: These deductions are reduced if you have more than $50,000 of either type of expense.)
Once you've written off that first $5,000, you can still get a tax benefit from other expenses. However, those startup costs will have to be written off, or amortized, over 15 years.
Sound like a long time to have to wait to get the full benefit of a startup deduction? It is. But for most small startups, these rules are an improvement over what was in place before the American Jobs Creation Act of 2004. Until then, all startup and organizational costs could be deducted over 60 months - but none could be simply written off. The smallest startups, which typically have fewer than $5,000 in total business startup costs, are going to find these new rules far easier to work with. "
Let's say I hire a programmer to write a website for me and pay $5,000. If I then register the business as an LLC, can I write that 5,000 from my personal taxes or only from the taxes that the website incurs?
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