How can I claim personal funds used for business expenses on next year taxes?

Question by aamu01: How can I claim personal funds used for business expenses on next year taxes?
I used some personal funds in the beginning stages of my new business. How can I claim this on my taxes next year. All answers are welcome. Thanks!

Best answer:

Answer by tro
when you use your personal money to invest in a business that is what they are, investments
this money could be represented on your business return as equipment, pre opening expenses, etc. and would be used on your business return, not your personal

What do you think? Answer below!

19 comments

  1. Bobbie says:

    All of your gross income from all sources of worldwide income will be reported on your correctly completed 1040 federal income tax return.
    I am assuming that you are asking for this information because you are a self employed independent contractor that has a business operation going on.
    In general, taxpayers may deduct the ordinary and necessary expenses for conducting a trade or business. An ordinary expense is an expense that is common and accepted in the taxpayer’s trade or business. A necessary expense is one that is appropriate for the business. Generally, an activity qualifies as a business if it is carried on with the reasonable expectation of earning a profit.
    The independent contractor self employment income will be reported on the schedule C of the 1040 tax form and you will be responsible for the 15.3% of the social security and medicare tax on your net profit from the business operation you also may need to make some quarterly estimated tax payments for the tax year 2010. The last payment would be January 18 2011.
    You would have to be sure that you handle your business deductions correctly for your business operation.
    For instructions and forms go to the IRS.gov website and use the search box for publication 334 a very good place to start with examples.
    Publication 463 Travel, Entertainment, Gift, and Car Expenses
    Use the search box at the http://www.irs.gov website for Small Business and Self-Employed Tax Center
    Filing Season Central is your one stop assistance center for filing your business returns. This includes Highlights of Tax Law Changes, Tax Tips, and more.
    2 of the seven tax tips for starting a business enclosed below.
    #4 Good records will help you ensure successful operation of your new business. You may choose any record keeping system suited to your business that clearly shows your income and expenses. Except in a few cases, the law does not require any special kind of records. However, the business you are in affects the type of records you need to keep for federal tax purposes.
    #7 Visit the Business section of the IRS gov website for resources to assist entrepreneurs with starting and operating a new business. Go to the IRS gov website and use the search box for the below referenced material
    *Starting A Business
    *Operating A Business
    *Closing A Business
    *Publication 4591, Small Business Federal Tax Responsibilities (PDF 470.1K)

    http://www.irs.gov/

    http://access.wa.gov/business/taxes.aspx

  2. hrblockerrolquinn says:

    Dear aa: Look at Sch C and also start up costs.

    This advice was prepared based on our understanding of the tax law in effect at the time it was written as it applies to the facts that you provided. Click on my profile to read more. Errol Quinn Enrolled Agent

  3. Jerome says:

    I like getting the letters, but please do not go telling folks they are heading for getting about a single a week. I have been lucky to have 1 a month. You need to do a little better than that….or end the pinocchio stories at the quite least. If 1 a month is what it is, then that is what it is.

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