Please help me figure out my TAX question for a small business?

Amortization is a method of recovering (deducting) certain capital costs over a fixed period of time. It is similar to the straight line method of depreciation.

The amortizable costs include the start-up costs of going into business, reforestation costs, the costs of pollution control facilities, and the costs of section 197 intangibles. Section 197 intangibles include Goodwill, Patents, Copyrights, Designs, Formulas, Licenses, Permits, Covenants not to compete, Franchises, Trademarks.

You can elect to currently deduct up to $5,000 of business start-up costs paid or incurred in the year the business starts. If the total startup costs exceed $50,000, the $5,000 limit is reduced dollar for dollar.

For start-up costs paid or incurred after October 22, 2004, the amortization period is 180 months if the taxpayer elects such. The period starts with the month your active trade or business begins. If no election is made, the startup costs are capitalized and sit on the books until the entity terminates.

Partnership.

A partnership files Income Tax Return Form 1065 and does not pay any taxes. The profit of a partnership is distributed among the partners. For this the partnership issues Form K-1 to the partners. Partners must include this profit in their own income and on this income pay 15.3% employment taxes.

You business may not be partnership. So consult an accountant or tax professional.

Your business will just show a loss and NO, you don't get that money back.....however, you will each be able to use 1/2 the loss when filing your personal return.

JSS adequately addresses your question. I just wanted to chime in and say that $100- for a CPA is C-H-E-A-P!! You should "jump on that" quickly. Most CPAs charge at least twice that...

G'Luck...

Mike Womack, Sr. Partner

Zero Degrees Tax LLP

Moore, OK

That is a loss. just ask the accountant about it.