sole proprietors or partners in a partnership/LLC

If you are a sole proprietor, you don’t take a salary in the form of a regular paycheck as as employee. Amounts taken out of a business by a sole proprietor should be accounted for in a draw account. You cannot deduct the sole proprietor’s own “salary” or any personal withdrawals made from the business.
Partners in a partnership also do not get paid a specific salary.

 » Read more about: Payments to Small Business Owners and Employment Tax  »

Expense incurred for a new business can be expensive. These expenses prior to the time your business starts called “start-up cost” are typically considered capital expenditures. They are part of your investment in the business assets, and investment costs are amortized. The IRS allows business owners to deduct all or a portion of their startup cost for the first year when they operate their business and to deduct the portion that they cannot deduct during the first year over 60 months starting with the month after they started their business.

 » Read more about: Deduction on Business Startup Expenses  »