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Tax Requirements for a Business Start-Up

Business startup exercise needs be thought of carefully and researched so as to have all the necessary requirements ready and up to the governing laws which regulate business operations in a particular country or set up. Both small scale enterprises and large scale business need be prepared in advance and compliance with the law held at first priority to ascertain that all the regulations and rules are adhered to. This goes along in assuring the customers and other clients that they are protected from exploitation from exploitation by some selfish businessmen in terms of prices tagged at products, standards observed in production and manufacturing of some products as well as cover up insurance policies which are offered by different agencies and insurance companies. Assuring the customers of the ability to make some stock returns if found faulty or of undesired quality and quantity too are some of the important factors which have to be considered since they all determine the amount of tax you pay for your business.

Some of the Other Tax Requirements for a Business Start-Up May Include


Organizational and start-up costs; for the start-up costs which mainly include products, transportation means, consultations fees, surveys for potential market, employees and trainers salaries as well as distributers and suppliers are included in the federal income tax with the exception of experimental and research costs incurred.

Setting up a partnership, registration and other legal fees such as accounting fees falls under the category of organizational costs and this practically applies for federal tax. Other expenses incurred such as transfer of ownership, professional fees and commissions are not taxed.

Other Deductions In Terms Of Tax


Deductions of up t five thousand dollars ($ 5000) of both organizational and start-up costs paid in between October in 2004 can be done which is gradually reduced by the same amount once your business start-up and organization costs hits over $ 50000 and the claim can be done in the first year of active operation of the business.



Depreciation of the business premises, assets and other equipment’s is another important factor you have to put into consideration when planning on start up a business as it affects the tax due which is accrued over the lifetime of the asset at question. It is always advisable to venture and purchase some of the equipment’s and other assets which are subject to rapid depreciation rate as this will mean your business will be losing more in terms of the tax amount you pay.

Trade Tax


Most definitely you will have to comply with the authorities and pay the agreed trade tax if you will be operating a business purely based on trade of commodities between countries or even locally and other customs duties may also apply especially in countries without bilateral trade agreement.

IRS classifies assets and dictates the amount of tax to be paid based on the lifespan of a certain asset and thus to be on the safe side of this for small businesses this may range from$ 100- $ 300.

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