The following is attributable to Engine Executive Director Evan Engstrom.
"Engine is proud to support the Support Our Startups Act, a bill that would reduce tax burdens on entrepreneurs in their first year of business. The bill from Sen. Tammy Baldwin (D-Wisc.) would help startups hit the ground running by increasing they amount they can write off as federal tax deductions in their first year.
"According to estimates, launching a startup requires tens of thousands of dollars of capital upfront to be able to afford things like business consultants, advertising, rent, and supplies. Currently, startups can deduct up to $5,000 of those expenses from their federal taxes in their first year of business. The Support Our Startups Act would raise that deduction to $20,000 making it more cost efficient for brand new companies to pay for the resources they need to get off the ground and enabling entrepreneurs to put those additional savings back into their businesses and make greater contributions to economic and job growth.
"Under the current system, the $5,000 is reduced by any startup expenses over $50,000. The Support Our Startups Act would raise that to $120,000, so that entrepreneurs would have to spend over $120,000 in startup costs before their deduction would be reduced. The bill would also make the deduction available to more businesses, regardless of whether they’re organized as a partnership, LLC, or corporation.
"We hope Congress moves quickly on this measure to encourage more entrepreneurs to invest up-front in the startups that are innovating and contributing to the U.S. economy and job market."