1. Module 10.5
Basic Tax Planning
Jim Beach & Chris Hanks

2. © School For Startups. All Rights Reserved.
Fully Deductible
Factory expenses
Accounting fees Rent
Insurance
Advertising Salaries, wages, and other
Interest paid
compensation
Bank charges Internet subs, domain names,
Security
Commissions and sales expenses and hosting
Small tools and equipment
Computers Laundry
Software
Legal fees
Consultation expenses Supplies
Licenses
Continuing professional education Maintenance and repairs Taxes
Telephone
Contract labor Office expenses and supplies
Trade discounts
Credit and collection fees Pension and profit-sharing plans
Travel
Delivery charges Postage
Utilities
Print and copy
Dues and subscriptions Professional development and training
Employee benefit programs Professional fees
Equipment rentals Promotion
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3. © School For Startups. All Rights Reserved.
Deductible?
Auto Not
Contributions Not
Bribes Not
Cell Phone MOSTLY
Entertainment 50% Deductible
Gifts $25 per person
Home Office Split business(yes) & personal (not)
Lobbying Not
Meals 50% Deductible
Penalties Not
Social Clubs Not Slide 10.5-3

4. © School For Startups. All Rights Reserved.
Income 100
- Deductions 35
Taxable Income 65
Slide 10.5-4

5. © School For Startups. All Rights Reserved.
Depreciation
Useful Life? Over 1 Year, then Depreciate It.
Over Useful Life. If Under $300, like staplers.
Section 179 – Sometimes up to $112k in 1 Year.
Slide 10.5-5

6. © School For Startups. All Rights Reserved.
Startup Depreciation
Startups Expenses and Organizational Expenses
Travel, Trade Shows, Seminars, Legal Fees, Licensing, Accounting
Consulting, Building Fees Related to Startup
Up to $5k a Year Each
(not inventory or raw materials)
Rest Amortized over 15 Years.
Slide 10.5-6

7. © School For Startups. All Rights Reserved.
With 8k Startup Costs
Income 100
- Deductions 35
Taxable Income 65
Slide 10.5-7

8. © School For Startups. All Rights Reserved.
Year One
Income 100
- Deductions 35
- Startup Deductions 5
Taxable Income 60
3k Remaining Startup Deductiblity
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9. © School For Startups. All Rights Reserved.
Year Two
Income 150
- Deductions 55
- Startup Deductions 3
Taxable Income 92
3k Remaining Startup Deductiblity
Slide 10.5-9

10. © School For Startups. All Rights Reserved.
Filing Taxes
Sole Proprietors Schedule C Pay Tax and 15.3%
Unemployment Tax
Partnerships Form 1065 Pay Tax and 15.3%
Unemployment Tax
LLC Schedule C if Pay Tax and 15.3%
solo, or 1065 Unemployment Tax
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11. © School For Startups. All Rights Reserved.
THANKS!
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Next: Lesson 6
Credit
Slide 10.5-11