Teach Soap

I would like to start my soapmaking business next year. However right now I am outgrowing my current soapmaking equipment and would like to purchase the equipment I will eventually use for that business sooner rather than later.

My understanding is that you can write off up to $5000 in business start up costs for the first year. I also believe that some of those items, like molds for instance, must be depreciated over several years.

Can I purchase future business equipment on my credit card this year for example and deduct it from my taxes next year after my business becomes incorporated? If so, will this look suspicious from a taxman point of view? Thanks ahead of time for input!

I would talk to your tax accountant. He would know more about this as that's what he does for a living.

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Irena
Closed minds are like faulty parachutes; they refuse to open.

I would doubt that you can buy something in 2013 and deduct it on your 2014 tax form, but this is really a question for a professional tax accountant, especially since tax laws and restrictions change yearly. Besides, most of us home preparers do not know the half of what we "could" do with personal taxes, much less business taxes. Some things should not be skimped on, and using a professional for business taxes is one of those imho.

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Remember, it's not just that we weather the storm, but how we dance in the rain.

Tammy