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I have started my own pet sitting business, and I was officially

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up and able to take...
I have started my own pet sitting business, and I was officially up and able to take clients by mid December. My fiscal year ended December 31st. I haven't gotten my first client yet. Do I still file taxes, and deduct start up costs, even though I haven't generated any income, or do wait and file my taxes and deductions when I file my 2013 taxes?
Submitted: 4 years ago.Category: Tax
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1/2/2013
Tax Professional: Megan C, Certified Public Accountant (CPA) replied 4 years ago
Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16,581
Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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Thanks for asking your question! I'm sorry to hear about your tax issue and I'm going to try my best to help you understand or resolve it.\

Thank you for your question, and thanks for using JustAnswer.com. As you have not yet generated income, your startup costs will not be deductible until 2013. On top of that, any expense that you have incurred up until you start generating income is known as a 'startup cost' and is not deductible in full during your first year of operations. Instead, it's spread over a period of 180 months.

There is an allowance to deduct up to $5,000 of startup costs in your first year. So, if your startup costs are less than $5,000 then next year you can deduct the entire amount. You can read about startup costs, HERE.

Please let me know if you need anything additional. Thanks for using JustAnswer.com and good luck with your pet sitting business!

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You should be aware that your question, as with most tax questions, can never really be answered completely...addressing all the permutations; that is because of the many assumptions that have to be made I have done my best to determine what I think you are asking and answering it in the most direct and understandable manner possible. If, however, after reviewing the questions, you have any uncertainties or further questions, please do not hesitate to ask.

Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
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Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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Tax Professional: Megan C, Certified Public Accountant (CPA) replied 4 years ago
Thank you for the positive rating. Please remember me the next time you have a question. Simply enter "MyVirtualCPA" in the subject of your question, and it will be routed directly to me. Thank you again for using JustAnswer
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