cblevins Posted December 30, 2009 Report Share Posted December 30, 2009 Does anyone know what the tax implications would be if the machine and all supplies were purchased one year (2009) but the business was not started until the next (2010)? Would you still be able to deduct the equip. and supplies? Cheri Blevins Link to comment Share on other sites More sharing options...
meg_marsh Posted December 30, 2009 Report Share Posted December 30, 2009 I would check with your tax man. Each state has different laws - as far as federal, I would think a general phone call would get you the answer. Link to comment Share on other sites More sharing options...
ffq-lar Posted December 30, 2009 Report Share Posted December 30, 2009 "Buying things does not make you a business--selling things makes you a business." This is a quote from my very wise hubby. You cannot "deduct" the value of purchases from your taxes. You reduce your tax burden (Federal, State, and Social Security) by offsetting those amounts owed by "depreciating" the value of your equipment over 5 years. If you have no income this year from your business, there is nothing (profit) to offset. Plus if you start this year, you will show a loss since you made purchases without income. You may only depreciate from the time you took delivery on the machine--if you bought in October, you only have 3/12ths of a year's worth of depreciation. Offhand, I would say wait and start January with all paperwork filed and an accountant on speed-dial to guide you through the pitfalls of a home-based business. States vary widely on their rules, counties and cities have all sorts of rules in place regarding home businesses--and watch out for your local rules set forth by housing developments--sometimes you cannot have customers come to your home, or deliveries by the UPS man are limited. Research and go in with eyes wide open and all legalities covered. Good luck and if you want to get going this year, you have today and tomorrow to do the set-up!!:cool: Link to comment Share on other sites More sharing options...
quiltmonkey Posted December 30, 2009 Report Share Posted December 30, 2009 Good advice above: Get a CPA to guide you on taxes and how to establish your business on the right track from the start. I have a CPA since the beginning. All states have different laws. If you want to talk to your local small business association, they can give you free advice and point you toward low cost or free resources. Best wishes to you! Link to comment Share on other sites More sharing options...
Sandra Darlington Posted December 31, 2009 Report Share Posted December 31, 2009 So...the first step is to contact a CPA for advise on forms, etc? Just curious, as I keep tossing this around in my pea brain. Link to comment Share on other sites More sharing options...
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