Business Planning Services Orangeville ON

One of the basic financial principals of being in business today: your revenues can be offset against your expenses.

Sure, some expenses, like meals and entertainment, may be only partially deductible. Other expenses may have to be written off, or "depreciated," over a period of years. But the basic fundamental concept - revenues justifying expenses - is still pretty easy to understand and explain.

But what about those expenses you rack up before your business even opens its doors, your business startup costs? There is good news here, and it has nothing to do with saving money on car insurance. Once you open your business and start generating revenues, you can write off many of those initial business startup costs at tax time.

But there is bad news...the rules for taking advantage of these deductions are not as straightforward as they are for your business's ongoing expenses.

Six steps to deducting your business startup costs

1. Track your business startup costs - begin at the beginning - before you start a business, you're more than likely to have a certain amount of startup expenses.
   
   Startup expenses are things associated with setting up your business or investigating the purchase of an existing business. Among the items that count as startup expenses:
   
   • Doing an analysis of your potential market(s)
   • Paying for consultants
   • Buying initial supplies
   • Advertising your new business
   • Paying employees before the business opens

Author: Joseph Anthony

Copyright 2009 StartupNation, LLC

Click here to read more from StartupNation