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Start-Up Expenses are reported in aggregate - one amount equal to the total of all expenses incurred. For active business activities, these costs are entered either under Assets/Depreciation or under Business Expenses depending...
As long as your start-up expenses are less than $5000, you can add them as Business Expenses. Continue past the expense categories (or choose Other Miscellaneous Expenses) to the page titled "Enter Business Expenses Not Yet Reported" and enter the description & amount (see screenshots below - click to enlarge).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."
Start-Up Expenses are reported in aggregate - one amount equal to the total of all expenses incurred. For active business activities, these costs are entered either under Assets/Depreciation or under Business Expenses depending...
As long as your start-up expenses are less than $5000, you can add them as Business Expenses. Continue past the expense categories (or choose Other Miscellaneous Expenses) to the page titled "Enter Business Expenses Not Yet Reported" and enter the description & amount (see screenshots below - click to enlarge).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."
Hi,
I've entered my business startup cost and fall into the over $5000 category. Is this money going to be used to offset income only? It doesn't seem to reduce my tax liability, right?
Thanks,
Todd
Assuming that your start-up costs are less than $50,000,
Expenses paid or incurred after October 22, 2004:
See TurboTax Best Answer.
[Edited 02/28/2021 8:31 AM PST]
This is great. my only question is. where do I find the "assets/depreciation as a capital asset for amortization" in turbotax?
Start up costs have a 15 year (180 month) recovery period using amortization (an equal amount for each month). The amortization is under the Assets expense for your business and you must select to 'Add an asset' once you reach the Business Asset Summary page.
@zamacona1
Hey Diane,
thank you so much for such a prompt response, super helpful and detailed!
I've done this as you mentioned. So next year that I do my taxes, will turbo tax already have this amortization automatically accounted for? or is there anything else that I would need to do in the future in order to account for this?
Thank you so much for your help!
Next year, you should be able to receive an amortization schedule transfer over into next year's return. Just to be cautious however, I would keep a copy of this year's schedule in your return just in case the transfer did not take place.
Okay got it. So it should be stored and automatically transfer next time within my turbo tax account and I’ll keep a copy of my return this year in case there’s any issues.
thank you
I realize this original question is quite old, but for any future readers ... training to start a new professional is not deductible, and therefore would not be part of startup costs.
Hi, @DianeW777 / @DaveF1006
Where do you enter this if you're filing with turbo tax business (partnership llc)? I tried entering under business start up cost summary page but it keep stating that since this is not the first year i'm filing tax it wont' let me enter it there. The only way I can enter this is by add this expense under my rental properties or create entirely new asset. Doesn't seem right to nest this under a rental property and if I create a new asset, it ask me for address and treats this as a rental property.
I'm assuming you are referring to the remainder of the amortization after you previously claimed the startup on your previous return. To enter the amortization you will follow these steps in TurboTax Business:
hi@BrittanyS thanks for the prompt reply.
For the life of me I can't find Business Asset Summary page? Is it under business info -> about your business -> rental real estate property summary? When I enter a new assets here it needs and address and it shows up as a rental property.
You can get to the asset entry page by following these steps in TurboTax Business Desktop:
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