Tax Break for Startups

This is good news that some entrepreneurs are finally getting to enjoy.

One of the most frustrating tax issues for entrepreneurs has been startup costs — they pour thousands of dollars into market research, advertising and other expenses to get their companies up and running, but have had little in the way of immediate relief from the government.

But, with a change in the Internal Revenue Code that took effect Oct. 22, 2004, companies — including many filing their first tax returns this year — are now allowed to deduct $5,000 of their startup costs. Any expenses above that amount must be amortized, or depreciated, over the next 15 years — the method that applied to all startup costs in the past.

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