Question

Avery has always wanted to own his own business. Last year, he took the leap and opened a pet store in a nearby city. He leases the store. He incurred start-up costs and large inventory costs for buying food in bulk. He had to purchase three large tables and a machine that moves the food to higher shelves for storage. He even hired five people: a groomer, two clerks, a stock person, and a bookkeeper. Unfortunately, his bookkeeper has accounting experience but no tax experience. Now, he is lost. How does he handle the start-up costs? What kinds of assets can he depreciate? What kinds of records should he keep? What changes were implemented in the Tax Cuts and Jobs Act that impacted this area of the tax law?

Answer 1

Answer:

He handle the Start up costs upto $5000 can be deducted in the first year itself. Cost well beyond $5000 can be amortized more than 15 years. Startup costs due exclude acquisition of assets, for example, furniture , machines.

Devaluation or depreciation is the recovery of the expense of the property over various years. You can deduct a part of the cost each year until you completely recovery its expense. In this manner, he can guarantee or claim depreciation  of assets, for example, three enormous tables and a machine.

Most supporting reports should be saved for in any event three years. Employment tax records must be saved for at any rate four years. On the off chance that you precluded income from your arrival, keep records for a long time or six years.