TurboTax Business will take you through an interview to prepare the business return, both federal and CA LLC, similar to the personal (1040) products.
In the business return you can report startup costs on the federal side and they will flow to the CA return.
Startup costs can only be deducted in the year they were paid (for a cash basis business). You can deduct up to $5,000 of startup costs as a current business expense. The remainder is amortized over 180 months. TurboTax will do this automatically for you -- just enter the total. Start-up costs include:
- Survey of potential markets
- Advertising the opening of the business
- Consulting or other professional fees paid in connection with starting the business.
- Wages to employees being trained for the new business
- Analysis of possible facilities, labor force, supplies, etc.
- Travel and related expenses to secure distributors, suppliers and customers.
Any expenses that you paid prior to starting your business will be your start up costs. Any expenses paid while your business is operational would be your "regular" business expenses or assets.
If you are in TurboTax Business (partnership/LLC) you can enter your startup expenses using these steps:
- Click the Federal Taxes and then Deductions.
- In the New Business Expenses section, click the Start box next to Startup costs.
- Enter the total amount. TurboTax will enter a deduction for up to $5,000 and enter the rest as an asset to be amortized.
NOTE: If you don't see Startup costs in the list of Business Expenses you need to indicate that the business was started or acquired in 2020. Please follow these steps:
- Click the Edit box next to General Info
- Click Edit next to General Info (On the again).
- On the Tell us about how long you've worked in [XX] mark the box I started [business name] in 2019 and enter the date you started or acquired this business.
- Click Continue and then Looks Good to get back to the Here's your [business] info screen.
@MrJ714
