QUESTION

Q: Which startup expenses are tax-deductible for my company’s income taxes?

—Tax Savvy CEO

ANSWER

A: Dear Savvy:

According to the IRS, three categories of startup expenses are eligible for deductions: expenses for creating your business, expenses for launching your business, and expenses for organizing your business. Each category consists of different types of costs, including the following:

Creating your business: These expenses include researching your business concept and finding a location. Expenses in this category include consumer surveys, feasibility studies, market research, and travel expenses to potential business sites.

Launching your business: These are costs incurred while getting your business up and running and include things like recruitment and training your team, selecting vendors, advertising, and professional fees, like our legal fees.

Organizing your business: You can write off costs associated with creating your business entity, including filing fees, legal fees, accounting fees, and expenses for holding organizational meetings.

As a Personal Family Lawyer®, who focuses on business planning,  we can help you identify and allocate your startup expenses to maximize the tax savings available to your new business.