Bookkeeping

Expensing start-up costs

If I purchased items to start a business with partners can I deduct them on my personal tax return?

I started a partnership business and withdrew money from my IRA for start up expenses like office furniture, computers, truck leases – can I use those expenses on my personal tax return

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    This answer is edited.

    If the partnership agreement requires you to pay personal partnership expenses (unreimbursed partnership expenses (UPE)). Don’t include expenses as an itemized deduction, and don’t combine these expenses with or against partnership amounts. UPE will reduce your self-employment income. This can be completed on your Form K-1.

    Office Equipment: As a business owner, you can itemized office equipment such as the computer and the printer (as Computer Hardware fixed assets depreciated over the useful life of the equipment see IRS MACRS table for more info), low cost office furniture (less than $2500 depreciated over time under ‘Furniture & Equipment’), or software like QuickBooks, Microsoft subscriptions for business use (depreciated over useful life as ‘Computer Software’). Postage and shipping supplies should be tracked with detail is also an allowable item to be itemized.

    You may deduct 100% of the cost of office supplies and materials, postage and stamp charges used during the year. Office equipment (used more than 1 year costing more than $500) can be depreciated by dividing the total cost of the equipment (asset) over a useful life period whereby each tax year you can deduct the depreciation amount until the total amount has been claimed.

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