{"id":137,"date":"2016-03-04T14:37:29","date_gmt":"2016-03-04T14:37:29","guid":{"rendered":"http:\/\/www.midtowncpafirm.com\/blog\/?p=137"},"modified":"2016-03-04T14:37:29","modified_gmt":"2016-03-04T14:37:29","slug":"business-start-up-costs-whats-deductible","status":"publish","type":"post","link":"https:\/\/www.midtowncpafirm.com\/blog\/index.php\/2016\/03\/04\/business-start-up-costs-whats-deductible\/","title":{"rendered":"Business Start-up Costs \u2014 What\u2019s Deductible?"},"content":{"rendered":"<p><a href=\"http:\/\/www.midtowncpafirm.com\/blog\/wp-content\/uploads\/2016\/03\/Start-Up.png\" rel=\"attachment wp-att-138\"><img decoding=\"async\" loading=\"lazy\" class=\"alignright size-full wp-image-138\" src=\"http:\/\/www.midtowncpafirm.com\/blog\/wp-content\/uploads\/2016\/03\/Start-Up.png\" alt=\"Start Up\" width=\"230\" height=\"183\" \/><\/a>Launching a new business takes hard work \u2014 and money. Costs for market surveys, travel to line up potential distributors and suppliers, advertising, hiring employees, training, and other expenses incurred before a business is officially launched can add up to a substantial amount.<\/p>\n<p>The tax law places certain limitations on tax deductions for start-up expenses.<\/p>\n<ul>\n<li>No deduction is available until the business becomes active.<\/li>\n<\/ul>\n<ul>\n<li>Up to $5,000 of accumulated start-up expenses may be deducted in the tax year in which the active business begins. This $5,000 limit is reduced (but not below zero) by the excess of total start-up costs over $50,000.<\/li>\n<\/ul>\n<ul>\n<li>Any remaining start-up expenses may be deducted ratably over the 180-month period beginning with the month in which the active business begins.<\/li>\n<\/ul>\n<p><strong>Example. <\/strong>Gina spent $20,000 on start-up costs before her new business began on July 1, 2015. In 2015, she may deduct $5,000 and the portion of the remaining $15,000 allocable to July through December of 2015 ($15,000\/180 \u00d7 6 = $500), a total of $5,500. The remaining $14,500 may be deducted ratably over the remaining 174 months.<\/p>\n<p>Instead of deducting start-up costs, a business may elect to capitalize them (treat them as an asset on the balance sheet). Deductions for \u201corganization expenses\u201d \u2014 such as legal and accounting fees for services related to forming a corporation or partnership \u2014 are subject to similar rules.<\/p>\n<p>If you would like to minimize your tax obligations legally, call <strong>212-631-0320<\/strong> and ask for <strong>Mark<\/strong>.<\/p>\n<p>&nbsp;<\/p>\n<p>Mark E. Feinsot CPA is a <a href=\"http:\/\/www.midtowncpafirm.com\/\" target=\"_blank\">top\u00a0rated New York City CPA Tax Accountant<\/a>\u00a0helping <a href=\"http:\/\/www.high-net-worth-cpa.com\/\" target=\"_blank\">high net worth individuals<\/a> and small business owners minimize their taxes while <a href=\"http:\/\/www.midtowncpafirm.com\/svcs_irs.htm\" target=\"_blank\">avoiding costly tax battles with the IRS and New York State<\/a>. \u00a0We provide additional expertise in <a href=\"http:\/\/www.aviationcpafirm.com\/\" target=\"_blank\">aviation accounting for private plane owners<\/a>, <a href=\"http:\/\/www.dentists-cpafirm.com\/\" target=\"_blank\">dental practice accounting<\/a> and <a href=\"http:\/\/www.lawyers-cpafirm.com\/\">law firm accounting<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Launching a new business takes hard work \u2014 and money. Costs for market surveys, travel to line up potential distributors and suppliers, advertising, hiring employees, training, and other expenses incurred before a business is officially launched can add up to a substantial amount. The tax law places certain limitations on tax deductions for start-up expenses. [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1],"tags":[90,89,88,87],"_links":{"self":[{"href":"https:\/\/www.midtowncpafirm.com\/blog\/index.php\/wp-json\/wp\/v2\/posts\/137"}],"collection":[{"href":"https:\/\/www.midtowncpafirm.com\/blog\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.midtowncpafirm.com\/blog\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.midtowncpafirm.com\/blog\/index.php\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.midtowncpafirm.com\/blog\/index.php\/wp-json\/wp\/v2\/comments?post=137"}],"version-history":[{"count":1,"href":"https:\/\/www.midtowncpafirm.com\/blog\/index.php\/wp-json\/wp\/v2\/posts\/137\/revisions"}],"predecessor-version":[{"id":139,"href":"https:\/\/www.midtowncpafirm.com\/blog\/index.php\/wp-json\/wp\/v2\/posts\/137\/revisions\/139"}],"wp:attachment":[{"href":"https:\/\/www.midtowncpafirm.com\/blog\/index.php\/wp-json\/wp\/v2\/media?parent=137"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.midtowncpafirm.com\/blog\/index.php\/wp-json\/wp\/v2\/categories?post=137"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.midtowncpafirm.com\/blog\/index.php\/wp-json\/wp\/v2\/tags?post=137"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}