Can I include an expense made on 12/07/2015 in my 2016 taxes

[apstndp]

I bought some business cards on 12/07/2015 to be used for my small business that I started in 2016. Can I include this expense in my 2016 taxes since it was made for the business that started last year?

[MargaretL · Accepted solution]

Yes, you can deduct your prior year(s) expenses that you incurred before starting your business.  The IRS allows a deduction for them as start-up costs. 

Per IRS Pub 535 Business Start-Up and Organizational Costs: "Business start-up and organizational costs are generally capital expenditures. However, you can elect to deduct up to $5,000 of business start-up and $5,000 of organizational costs paid or incurred after October 22, 2004. The $5,000 deduction is reduced by the amount your total start-up or organizational costs exceed $50,000. Any remaining costs must be amortized."

In TurboTax, there is separate entry for Start Up Costs in Business Expenses section.You will be asked to enter your total startup cost, and the date incurred (which should be before you started your business). Then, the program will ask you how much you'd like to deduct; the rest is automatically amortized for you.

[apstndp]

thanks for your reply TurboTaxMargaretL, but please know that the business did not start until 2016 and these cards were not really used until the beginning of year 2016. further advice will be appreciated.

[MargaretL]

Thank you for the clarification. Please refer to my answer above... you can deduct the bus. cards in 2016, but as start up costs...

[apstndp]

thank you!!!

[MargaretL]

My pleasure! Good luck with your business!