Quote:
Originally Posted by janetvj
You did have the income; you just elected to use it to prepay your loan. But it is still income. The interest on the business loan is deductible.Your start-up costs should have been treated as a capital expense, and depreciated over time, so are not fully deductible within the same year.
You definitely need to talk to your CPA, or another one if you don't trust the one you have. Sounds to me like you need to do some tax planning.
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Janetvj is correct. Actually Lingling you did very well! You took out a business loan and was able to create profits in excess of your expenses. That's a job well done. Congratulations! Where you messed up was not understanding the basics of income, liabilities, income statements, balance sheets and taxes. Going forward, you may want to enroll in evening business classes at a local university so you don't fall into future potholes.
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