I am a hobby baker but would love to open my own store in 2 or 3 years. I have been slowly picking up different equipment and such over the years.
I have started looking at some more expensive purchases (like a sheeter, agbay, etc) that I'd like to have, but don't know if I should wait till I'm an actual business to buy them. I'm thinking if I'm a business when I purchase, I might be able to expense them or get some kind of tax advantage.
If there is no such tax advantage, I might be better off just picking up things as I go along and having time to really get comfortable with using them. And the fact that it is easier to space out the items and budget for them.
What do you all think? I'm in Florida, btw.
I would hold off on expensive purchases until you are ready to start a business. Any purchases directly related to your business (including the cost of meals where business is discussed!) should be deductible, although you may need to capitalize expensive equipment (which means you can only deduct a portion of the total cost each year for several years). You also may be able to deduct operating losses against your personal income.
Here is some info from the IRS on deductions:
And FYI, you don't need to open a retail shop to have a legitimate business, many people here operate out of rented commercial kitchens.
Thanks! Appreciate you taking the time to reply.