I am a Dr who setup my SCorp in TX in 2018. There were startup costs incl. lawyer, credentialing, miles, but NO income yet. How to answer "Was SCorp open for business?"

Forum|Forum|7 years ago
June 4, 2019
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I am in the process of opening my prviate practice. I set up a professional association (P.A.) in Texas that received S-Corp status in late 2018, but haven't started seeing patients (generating any income) yet bc still in process of getting credentialed with insurances. (S-Corp election does start on same date as incorporation, according to my tax document).

1) When should I consider myself "open for business?"

2) If answer is "not open for business yet," can I still deduct above-listed expenses (attorney, filing fees, credentialing, mileage toward getting contracts) for 2018? I did have income through an employed position that was unrelated to my S-Corp.

TurboTax Business Windows

Best answer by DavidD66

You are allowed to deduct $5,000 in business startup costs and $5,000 in organizational costs, but only if your total startup costs are $50,000 or less. If your startup costs for either area exceed $50,000, the amount of your allowable deduction will be reduced by that dollar amount.

You will have expenses but no income, so you will receive a K-1 with a loss, which you can use to offset your other earned income.

You are open for business when you are ready to see patients in your office. You don't actually have to have any patients, but you have to be ready to see/treat them.

DavidD66Answer

Level 15

You will have expenses but no income, so you will receive a K-1 with a loss, which you can use to offset your other earned income.

You are open for business when you are ready to see patients in your office. You don't actually have to have any patients, but you have to be ready to see/treat them.

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