I started a new business last year and do not need to amortize startup costs. In the final review, I am being required to input data to amortize costs. How do I unelect?

[palmetierlaw]

The errors occur on IRC Section 195(b)(1) form entitled Election to Amortize Start-up Expenditures with a mandate to enter a description, amount and date. There are no costs to enter.

[MichaelDC · Accepted solution]

If you don't want to amortize your start-up costs, then follow these steps

• Switch to Forms mode
• In the left pane, select the form you want to remove (Election to Amortize Startup Costs) 
• After the form is generated in the right pane, click the Delete Form button at the bottom of the window.

If you report Start-Up Costs in excess of $5,000, you have made the election (no statement or form is required). If you receive an error on review, return to the Start Up Costs section and check your entries for the pages after the initial input. 

Startup Costs are generally entered under Business Expenses from the Business Summary page under the Business tab in TurboTax Online (see screenshot #1 below - click to enlarge). This option appears if you checked the box for "I started my business in 20XX."

To find this section easily, search on "schedule c" and jump to the start of this section. Continue through the screens until you find the Business Expenses page for your business.

Enter a custom description, the total amount (may be more than $5,000), and a date before you began your business (usually the first date you incurred any start-up expense). See screenshot #2 - note Learn More info.

If you entered more than $5,000, enter the amount you wish to deduct on the next page, and TurboTax will calculate the amount to be amortized and select the correct period for you.

If you have an active business (not rental), you can expense up to $5,000 in startup costs the first year and amortize anything over $5,000. The balance of Start-Up Costs over $5,000 are entered as an Asset for Depreciation (Intangible, Code 195, over a period of 15 years). 

Startup costs for Rental activity must be amortized because this is a passive activity. Section 195 for Start-Up Expenses applies to active businesses only. See this discussion for more (ext link): How to Deduct Startup Expenses for Rental Property

If you did not have any startup expenses, go back to the summary page for your business and review your input to move the costs to another category.

[doctorjeep]

I have this same question. The instructions don't work on the 2021 version--I don't have the option to delete the form. How can I skip this, as I'm not amortizing startup costs?

[Kbf22]

If my start up fees were over $5000, how do I figure out what my expenditure amount is for the Election to Amortize Startup Cost? Would it be the full amount of my start up cost or would it be the difference over $5000?

[Vanessa A]

You can deduct up to $5,000 for the first year as long as your total start up costs were less than $50,000.  If they were more than $50,000 then you would reduce the $5,000 dollar for dollar for the amount over $50,000.  So if your total start up costs were $53,000, you would only be able to deduct $2,000.

The rest of the start up costs are amortized over 15 years.