Business startup

[bobsalas]

What is the name of your state (only U.S. law)? OREGON

I am going to start a new business and am going to run up some expenses in 2008 - franchise fees, office supplies, stationary, office equipment, etc. - but do not expect to see any income until January or February 2009.

Can I claim all of my expenses, above, in 2009?

The franchsie fee is $9995.00. Can I claim all of that in year 1?

Thanks for all of your help.

 

[FlyingRon]

Certain start up costs can be amortized over a few years. However most things are deductible when you pay them (a few things provide for deducting them earlier not later). You should talk to a tax professional that deals with small businesses.

The other option is to adjust your tax year to fit the creation of the corporation.

 

[LdiJ]

What is the name of your state (only U.S. law)? OREGON

I am going to start a new business and am going to run up some expenses in 2008 - franchise fees, office supplies, stationary, office equipment, etc. - but do not expect to see any income until January or February 2009.

Can I claim all of my expenses, above, in 2009?

The franchsie fee is $9995.00. Can I claim all of that in year 1?

Thanks for all of your help.

No, you cannot push everything into 2009. There are different ways that you could treat things and probably not raise any eyebrows.

The franchise fee will have to be amortized over the length of the franchise contract, beginning in 2008.

All of the rest of your costs could be lumped together as "start up costs" and amortized over 5 years.

OR

The office equipment could to be depreciated over its proper useful life, beginning in 2008, and you could expense the stationary and office supplies.

Any 2008 loss would end up being an offset to your other income.