do you have to pay tax on a new business if you dont make a profit in that year,and still deduct equipment?

Answer 1

You always have to pay taxes. As for a new business, it may actually be a benefit when you go to file taxes. The tax benefits and deductions a business owner gets are extremely greater than that of an employee.
I believe you can even have up to 5 years of losses before you face any sort of penalties, but may need to verify that with your accountant or whomever does your taxes.

Answer 2

That depends upon how the business is organized. If you're a Sole Proprietor you won't have to pay any tax on the business income until you start turning a profit. And you may have deducbible losses against other income until you do start turning a profit. Watch out for start-up costs, as they are treated differently than ordinary losses.

If you are an LLC or Corporation you'll probably have minimum State franchise fees to pay regardless of any profit or loss. Some states also levy gross receipts taxes on Corporations (LLCs are treated as corps by virtually all states) so even if you showed a loss you'd still have to pay the GR tax.

If you are new to the business arena, I would strongly urge you to retain a CPA for some guidance on setting up your bookkeeping system and addressing the tax issues. That's especially true if you formed a Corporation, Partnership, or LLC. This is far too complex for the storefront tax prep mills, get professional guidance.

Answer 3

Complete a Schedule C, deduct your equipment, and follow the form's instructions. As a business, you got to show a profit three out of five years, or the business will be considered as a hobby and then taxes have to be amended.

Answer 4

usually yes..in NYC occupancy tax for a starter.....
see a tax accountant................