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If I have roughly $6000 in expenses from a new business, does it give me a better tax break to put the majority of that go into "start up costs" or "business expenses"?
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If I have roughly $6000 in expenses from a new business, does it give me a better tax break to put the majority of that go into "start up costs" or "business expenses"?
It's not really about which gives you a better tax break. You need to properly allocate these expenses to the correct category. So, if the costs were startup costs then that's where they need to go. If they were other costs, then they would go in the other category.
Since your startup costs were only $6,000 you can deduct up to $5,000 in start-up costs.
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If I have roughly $6000 in expenses from a new business, does it give me a better tax break to put the majority of that go into "start up costs" or "business expenses"?
You don't have much of a choice here. Expenses incurred before the business was "open for business" are start-up expenses.
Business assets are not expenses. So any equipment purchased that will be used to produce income, are assets. That stuff gets entered in the Business Assets section and depreciation starts on the date the equipment was place in service. So regardless of when you purchased the equipment, the in service date can not be before the business was "open for business".
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