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Hi,
I really appreciate if some experts on this board can help me understand this situation, since I don't seem to be able to clarify this from all the tax documents I read.

I am starting my own business, and this year, I have made lots of efforts to do initial marketing research and sampling preparation to see how acceptable my produt could be.

I didn't register the company legally yet, since I didn't want to pay the fees and tax this year.

When I do my 2008 tax, can I use Schedule C to report my business expenses?

I still have my full time job right now, so all these expenses will go to offset my regular income.

I am posting this to the "self employed fools" board, too.

Thanks a lot for your help as always.

Have a good holiday season!

Christine
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Schedule C would be the right place, since this business venture is neither a partnership nor a corporation. And I'll assume it's not a farm or rental of real estate (which would go on schedules F and E, respectively.)

But the real questions is if you can deduct these expenses at all. It sounds like these might be start-up expenses. Those are deductible only after you actually start the business.

One of your stops as you start getting ready to go into your own business should be with a qualified tax pro to go over these kinds of issues. They can also help you decide what form your business should take - proprietorship, LLC, C corporation, or S corporation.

--Peter
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Thanks a lot, Peter, I will definitely take the advice of consulting a pro.

I wanted to see if I should set up the business in 2008 with a few days left now.

I understand more clearly now that without being active in business, I shouldn't deduct any business expenses.

Happy Holiday.
Christine
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Thanks a lot, Peter, I will definitely take the advice of consulting a pro.

You're welcome.

I also should have pointed out that a quick consult with a lawyer is also in order. They would have some good comments as well on whether to operate as an LLC or a corporation or a proprietorship. And they can also suggest whether any kind of insurance for the business would be a good idea.

The form your business takes is not a simple decision. But some will try to make it simple - usually those who want you to hire them to form an LLC or a corporation.

--Peter
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