1040 Deduction ?

[kdrifter440]

First off I would like to say I have been lurking/reading on this forum for quite awhile and it is very resourceful.

I am a bit confused on how the deductions work. I have a full time job and am looking into starting my own business. This has been a in the works for a while now. I have decided to form a single member LLC for this business. I plan on keeping my full time job and run the business after hours until my business income exceeds 150% of my income from my current job.

My question is when I figure my business deductions on my Sch. C will I still be able to claim my "Married" standard deduction on my 1040? I figure the first year and a half of all profits will be eaten up by deductible business expenses but may not exceed the standard deduction. Therefore there will be little if any profit made by the business. The reason for this is that I do not want to go into debt to start this up. For the most part the growth will be driven by success like I believe it should.

Thanks for the help,
Jerry

>>will I still be able to claim my "Married" standard deduction on my 1040?<<

Yes if you are married on the last day of the year.

The standard deduction is in place of Sch-A type expenses and has nothing to do with Sch-C business expenses. In other words you would use/get the standard deduction if it is more than your Sch-A itemized deductions (medical expense, taxes, mortgage interest, charity, misc, etc.).

Your Sch-C actual business expenses subtract from your Sch-C business income and the net business profit or loss is what is taxed/deducted on page 1 of the 1040 before the standard deduction. Plus the net profit if over $400 is subject to self-employment tax on form 1040SE attached to the 1040.

Good luck with the new business.

[kdrifter440]

OldJack,

Thanks a million! I have a appointment next month with a CPA about "questions" regarding bookkeeping, taxes, and anything else I should know. I am trying to get some of the simple things answered before the meeting so I don't burn up to much time with the easy ones. So I would imagine that there will be a lot more wondering of mine posted.

Thanks again,
Jerry