Which tax deductions can I claim as a founder?
March 31, 2022 | 50,00 EUR | answered by Karl Albrecht
Dear tax advisor,
I am about to start my own business and am unsure about the tax deductions I can claim as a founder. I have not yet delved deeply into the topic of taxes and want to make sure I am not overlooking any opportunities for tax savings.
Regarding my current situation: I plan to start a small sole proprietorship in the field of event planning. I will likely need to make some investments to get my business up and running, such as purchasing office supplies, promotional materials, or renting an office space. Additionally, I am expected to generate a low profit in the first few years as I am just starting out and need to acquire clients.
My biggest concern is that I am not taking advantage of possible tax benefits and may end up paying unnecessarily high taxes, which could burden my financial situation. Therefore, it would be very helpful for me to know which costs and expenses I can deduct as a founder to minimize my tax burden.
Could you please provide me with an overview of the most important tax deductions for start-ups? Are there any special regulations or incentives that I, as a founder, can benefit from? How can I best document my business expenses to be able to claim them for tax purposes later on?
Thank you in advance for your support and expertise.
Sincerely,
Hildegard Falk
Dear Mrs. Falk,
Thank you for your inquiry regarding tax deductions for start-ups. As a tax advisor with extensive experience in the field of entrepreneurship, I am happy to provide you with an overview of the key tax aspects that are relevant to you as a prospective business owner.
As the founder of a sole proprietorship in the event planning industry, you have various options to minimize your tax burden. One of the most important tax deductions in your case is business expenses. These are all costs directly related to your business and necessary for generating income. This includes the purchase of office supplies, promotional materials, office rent, as well as expenses for phone, internet, travel to clients or suppliers, training, or insurance.
Investments in your business can also be claimed as tax deductions. This includes purchases of computers, office furniture, software, or other business equipment. These can be either fully depreciated in the year of purchase or claimed as depreciation over several years.
Furthermore, there are special regulations and incentives available for start-ups that you can take advantage of. These include investment allowances, the Germany start-up coaching program, or bridging grants. These programs provide financial and advisory support to start-ups during the business start-up process.
To claim your business expenses for tax purposes, careful documentation is essential. Therefore, keep all receipts and invoices carefully and maintain a proper accounting system to make your income and expenses traceable at all times. The more accurate and comprehensive your bookkeeping is, the better you can fulfill your tax obligations and benefit from tax advantages.
I hope this information is helpful to you. If you have any further questions or require more detailed advice, I am at your disposal.
Sincerely,
Karl Albrecht
