Start Up Costs for your new business.

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Start Up Costs for your business

Start Up costs can be defined as the costs incurred to prepare ground for your business. It is a cost that you pay or incur before first day of your business.

Examples of the Start up costs include, but not limited to:

  • Market research and survey expense
  • Training of potential employees
  • Travel expenses incurred for market research,
  • Expense to establish relations with prospective suppliers etc.
  • Advertisement costs incurred before the start of the business
  • If you are purchasing an active trade or business, investigative costs incurred in the search of the opportunity is considered Start Up cost.

Note: It will not include Research and Experimental costs, taxes, interest etc.

Treatment of Startup Costs for taxes:

You may deduct $5,000 of start-up costs in the year the business begins. The remaining expenditures are amortized over 180 months, beginning in the first year your business begins.

Expenses you incur from the time the business officially begins are currently deductible.

For anything to be deducible, do not forget to keep good records.

This ends our series of Starting A Business. We will start new series next time.

You can review all our blog post for Starting  A Business here.

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