Sorry guys... I used the search function extensively, but the hits are so vague when it comes to specific tax questions. I have an appointment with H&R Block in early December, but I wanted to throw this out.
I've managed to rake up about $8,000 in tax deductions this year since I started my business in October (this includes the $$$ that I am paying to various models)
What really sucks is... I either need to deduct 100% of the expenses this year as Section 179 and operating costs (immediate deductions), or I must depreciate most of them over 5 years or so if I declare them as "start up costs" because my income will not start to come in until 2007.
So under 179, I get a bigger tax return this year (about $1,200 more)... but that $8,000 would be better off deducted in 2007 since it would lower my taxable income and not be subject to that whopping 28.6% tax (costing me $2,288!!)
Is there any way to delay a section 179 deduction until the following tax year? I don't want to end up paying an extra $1,000 just because I started the business late in the year and won't have business income until '07
Any tax experts in here?
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