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


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
Mike C.
16 points
Get up to $750K in working capital to finance your business: Clarify Capital Business Loans

1 Answer


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
5,090 points

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Startup Costs Tax Investment USA Sole Proprietorship