I'm a sole proprietorship investing 30k pre-tax money in a new small business


3

I am investing 30k in a new business with pre-tax money I made this tax year by way of my sole proprietorship. I'm I able to write this off somehow, besides the 10k for start-ups??

If not I was thinking of opening a solo 401k and using the funds I put in to invest in the new business...any suggestions would be great!

Startup Costs Tax Investment USA Sole Proprietorship

asked Sep 1 '13 at 16:28
Blank
Mike C.
16 points

1 Answer


2

Suggestion number 1: talk to a tax adviser (CPA/EA) licensed in your state. Being aggressive with taxes is never a good idea without a professional guiding you.

Suggestion number 2: don't do it. Investment is not a tax deductible expense, so you cannot deduct investing in a new business. Doing it through a 401k may cause problems if you want to invest in your business which will pay you salary. Usually, self-guided retirement plans are used to invest in rental real estate, or third-party managed companies. When you invest in yourself, it can be classified as a "related-person transaction" and invalidate the whole plan.

answered Sep 4 '13 at 03:35
Blank
Littleadv
5,090 points

Your Answer

  • Bold
  • Italic
  • • Bullets
  • 1. Numbers
  • Quote
Not the answer you're looking for? Ask your own question or browse other questions in these topics:

Startup Costs Tax Investment USA Sole Proprietorship