What Can You Deduct and When?
a new business is an exciting time. But before you even open
the doors, you generally have to spend a lot of money.
You may have to train workers
and pay for rent, utilities, marketing and more.
Entrepreneurs are often unaware that many expenses incurred by
start-ups can’t be deducted right away.
How expenses are handled on
your tax return
When planning a new enterprise, remember these key points:
Start-up costs include those incurred or paid while creating
an active trade or business — or investigating the creation or
acquisition of one. Organizational costs include the costs of
creating a corporation or partnership.
Under the federal tax code, taxpayers can elect to deduct up
to $5,000 of business start-up and $5,000 of organizational
costs. The $5,000 deduction is reduced dollar-for-dollar by
the amount by which your total start-up or organizational
costs exceed $50,000. Any remaining costs must be amortized
over 180 months on a straight-line basis.
No deductions or amortization write-offs are allowed until the
year when “active conduct” of your new business commences.
That usually means the year when the enterprise has all the
pieces in place to begin earning revenue. To determine if a
taxpayer meets this test, the IRS and courts will generally
ask: Did the taxpayer undertake the activity intending to earn
a profit? Was the taxpayer regularly and actively involved?
Has the activity actually begun?
An important decision
Time may be of the essence if you have start-up expenses that
you’d like to deduct this year. You need to decide whether to
take the elections described above. Recordkeeping is
important. Contact us about your business start-up plans. We
can help with the tax and other aspects of your new venture. Call us at
SMEED CPA Adds Financial
Services To Help Clients With
Investments & Insurance
often we here at SMEED CPA are asked about financial issues
that impact our clients investments and their portfolios.
We always offered our opinion and suggestions but in order to
help our clients actually execute the changes we suggest,
SMEED has created a Financial Services division.
SMEED Financial Services, Inc. will be able to
work with both individual and business clients on their
investment portfolios and manage assets on their behalf.
SMEED Financial will include Michael Uadiale,
ACA, CPA, CGMA; and Pablo Blanco who has
recently joined SMEED and comes with over 18 years of
financial sales and advising experience with affluent
Watch your inbox and mail boxes for more specific information
on services SMEED Financial Services, Inc will make available
Would You Give Me Your
Feedback & Testimonial
on Our Hotline?
Hello it’s Michael Uadiale, CPA of
SMEED CPA Inc. We’ve just installed a toll-free
number that I would like for you to call and tell me how you
think we are doing as your CPA firm.
Just dial 800-609-9006
extension 3638 and follow the instructions. If we’ve
done a good job please let me know. And if we can
improve on anything, please mention that too.
Us Be Found on
Also as we expand our business,
we find more and more people are using
YELP and Google
to look for us by searching Brentwood accountant or
When they do this we want to
be FOUND on GOOGLE. One way you can help us
is to give us an
ONLINE REVIEW on our Google Maps/Places listing --->
or on our YELP local listing
click here to go to our Google Listing for SMEED CPA and
click on the
YELP link to go there.
Scroll down to the Review area.
On either site it may say: Been here?
Rate and review
You will click on the Rate and
review link and then log in, then
give us a review!
You can choose between 1 and 5
STARS and write in what you think about the tax or accounting
work we have done for you.
It's that simple. Thank
you in advance for your help and cooperation!
As always you can call our offices if you have any
questions about these or any other accounting related issues, at
Regards, Michael Uadiale, CPA,
Managing Partner, SMEED CPA,