Just a heads up for anyone starting out. I run a small bakery and assumed all startup costs were treated the same. Apparently not. Some things got expensed right away, others had to be amortized over 15 years (organizational costs?), and then there's the whole Section 179 thing for equipment. I'm now redoing my books from last year because my DIY attempt was a mess. Don't be like me. Anyone else get tripped up by this?
Taxes
I didn't realize some business startup costs had different tax rules
Wait until you hear about the $5,000 deduction limit for startup costs in the first year. I found out after I'd already filed. Fun times.
My accountant just handed me a spreadsheet and said 'don't touch this.' Best money I ever spent.
Wait, what qualifies as 'organizational costs'? I opened a small consulting LLC and just dumped everything into one category. Should I be worried?
Things like legal fees for setting up the LLC, state filing fees, maybe some accounting setup fees. Not equipment or inventory. But honestly I'd just ask a pro. I'm just a guy who's made a lot of mistakes.
lol @ 'dumped everything into one category.' That's basically what I did my first year. Cried a little in April.
Thanks. I'll start digging through receipts.
Section 179 is great but don't forget bonus depreciation is phasing out. Not sure about all the rules though. I just let my guy handle it.
Wait until you learn about the 15-year amortization on trademarks. I bought a logo my first month and apparently I'm stuck writing that off slower than my coffee gets cold.
Trademarks Too? My brand name is a sticker I made on Canva. Now I'm terrified to look at what I did.
Canva brand? Same. But I didn't trademark it, so at least I dodged that paperwork.
Honestly the tax code for small biz is a choose-your-own-adventure novel written by a committee of sadists. Just find a good local accountant and bring them baked goods.
Wait, does this mean I cah't expense my 'business lunch' that was actually just me eating tacos alone in my car?