Personal, Small business tax deductions in addition to standard?
Hello,
Got a quick question. Are expenses incurred by a small business startup compound on a personal standard deduction? My scenario is below:
-I’m employed (not self-employment, at an actual company) and rent an apartment
-Say I incur ,000 in small business expense this year for a SIDE business.
Is this ,000 write off in conjunction with the standard deduction (of around 5k for single)? So, in other words, can my income be claimed to be 15k lower? If my startup costs incur ,000 is there a reason for me to NOT do the standard deduction? It seems awfully stupid that standard deductions exist, as I would’ve kept my own money instead of spending it on all this crap…
Tags: apartment, business expense, conjunction, crap, money, self employment, side business, small business startup, standard deduction, startup costs
#1 written by tro June 22nd, 2010 at 20:37
you are mixing apples and oranges
your standard deduction is the standard established with IRS for taxpayers depending on your status and it includes things you might itemize if they exceeded the standard ie. medical, taxes, interest, contributions, casualties and misc things like union dues etc
if you are starting a business the expenses you incur getting this business up and running are called preopening expenses and are not deductible until you actually have the business running and then they are amortized over a period of 5 yrs(there is a $5000 special allowance)
you need to get publication 34 from http://www.irs.gov to show you what are business deductions etc.
your side business will be reported on Sch C which is included with your 1040
#2 written by Kas June 22nd, 2010 at 20:37
Was the business income your only income for the year? Business expenses go on a Schedule C, and go against gross income from your business. If you have other income (i.e. another job, retirement distribution, social security) It would still probably be beneficial for you to itemize using a Schedule A because Sch. A deductions go against all of your income, not just business income. Hope that makes sense and helps!