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Startup cost deduction

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Top Start-up tax deductions for you

Advertising & Promotion

Launching your business requires you to promote and advertise your product and service out in the market, on social media platforms, on websites, and etc. All of this can be pretty expensive, however, you can easily claim it as a self-employment deduction.

Car & Mileage

Even if you operate your business remotely, you must’ve logged a few miles in your car traveling to investor meetings or banks. You can deduct your car and mileage expenses. If you write off a percentage of your total vehicle expenses. You can also deduct parking and toll fees.

Bank Fees

Bank, credit card, loan fees or any of the charges associated with your business bank account are deductible from your 1099 employee taxes.

Merchant Processing Fees

Any fee associated with processing credit cards is deductible. This also includes fees incurred using services such as PayPal, Stripe, Square, and others.

Licenses & Permits

The cost of all the licenses and permits associated with your business is fully deductible. Once you claim these deductions, you can use a tax estimate calculator to figure out whether you need to pay estimated quarterly taxes.

Commissions

Any commissions you pay to an affiliate or partner to promote your product or service are deductible.

Education

Startups, generally, tech startups are known for ongoing learning and training. Any work-related reference materials or online training program is deductible.

Equipment

Equipment purchases are deductible. However, it is important to figure out whether the equipment will be taken as an expense and written off in one tax year, or it will be taken as an asset and depreciated over several years.

Furniture

Furniture can either be written off or depreciated, just as equipment.

Events

Any expense related to those business events can be written off. This includes catering fees, venue rentals, and entertainment costs such as hiring a speaker.

Insurance

You can write off the cost of any insurance you’ve claimed to protect your startup. You can write off the cost of insurance for general liability coverage, commercial property, cyber liability, or loss of income.

Interest Expenses

If you took a loan to get your establish your business, you can write off the finance charges and business loan interest.

Meals

Any meals consumed with employees, while traveling, during work shifts, or with business clients, are fully deductible.

Payroll Expenses

You can deduct the payroll expenses such as service fees paid to the provider you use, workers’ compensation insurance, and local, state, and federal payroll taxes.

Professional Fees

Any legal, financial, or professional consultations for your business are deductible.

Freelancers claiming this deduction

Game Developer

If you are a game developer and decide to start your own gaming business, you can deduct the cost of marketing, advertisements, R&D, commissions, equipment, contract designers, office rent, and etc.

Fashion Designer

As a fast fashion entrepreneur, if you decide to hire an actor or actress to appear in an advertisement to promote your retail product or service, any fee you pay them for their role is considered a business expense and will be deducted from your taxes.

Businessman

As the owner of an emerging food-delivery business, you can deduct all the wages, bonuses, and benefits that you offer your employees.

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