Are you thinking about starting a new business? If so, congratulations.
We know it can, and probably will, be an exciting ride. But like many other exciting rides starting or buying your own business can be fraught with dangers, not the least of which are potential tax pitfalls.
In one recent case, a decorated ex–Air Force pilot sought to start an aviation business. She hoped to offer aerial land surveys, photography, and flight charters, along with the provision of aviation safety consulting.
She traveled the country looking to buy an airplane, which she eventually did. Unfortunately, she never got past the preparatory stage and, without clients, gross receipts, or service contracts, the court ruled she was not entitled to deduct any of her expenses.
You can avoid this woman’s tragic consequences and write off all of your costs, including those “thinking about it” costs. But since this is tax law, you face some tricky rules that can prove costly, as they did for our pilot.
In this article, we explain the rules for starting a new business so you can understand them and earn all the tax benefits the tax code offers. And the tax benefits are more than you would think. In fact, they begin when you start spending money while you are thinking about this new business. ... Log in to view full article.