new business tax questions

[shivaa]

I will be graduating in january and taking my national exam shortly after. i am in the process of getting stuff ready for my business, as i need some of these things to use for my practice sessions anyway.

I will be setting up a private practice after the first of the year. However, since I am buying stuff in this tax year, is there anyway to write these off as business expenses?

Or is there a way to set up my business this year but I won't have any income yet?

I haven't talked with my tax guy yet, just trying to get an idea of how this might work before I go in.

Thanks!

 

[mikeyg]

I agree wtih Pete - talk to your tax man!! We could lead you astray so easily, and with SUCH good intentions!

I believe I had to write off my table the year AFTER I bought it so that it could be a business expense, since I had not started the business yet by the end of the year I bought the table. But there are so many variables to tax laws, not to mention they CHANGE constantly, that it's not safe to just do what someone else did.

 

[PuppyMama]

Tables are generally considered a depreciable asset, which means it is written off over its useful life - 5-7 years by IRS standards. This would be a depreciation expense entry on your financial statement.

Anything that lasts more than a year - including linens - are considered a fixed asset.

If you are Incorporated - not sure if it applies to LLC - you can expense equipment in the year purchased up to the total amount of your profits. Meaning, you can't expense equipment to the point you create a loss.

This is a big advaneforum.xxxe of being an S corp. If you do outcalls, you can buy a car - even if you finance it - and take the entire cost as an expense immediately, so long as your profits (income) equals the cost of the car.