Start Up Costs

[jemmadky]

I started my single-owner LLC late last year and incurred start-up costs of less than $50,000, but the business did not have income last year. Can I still claim the $5000 deduction this year and amortize over 15 years? Does it deduct from our personal income instead of business? 

[DaveF1006]

To clarify, $5000 deduction for what?

@jemmadky 

[jemmadky]

Thank you for the question. When I am in the start-up costs section in Turbo Tax Home & Business it says if those costs are less than $50,000 then I can claim $5,000 the first year (2023) and amortize the remainder over the next 15 years. However, what I am unclear about is if this is allowable if there was no income for that business in 2023. Does there need to be business income for me to claim the start-up costs? Or since I am a single-owner LLC, does it offset my personal income? 

[Rick19744]

Additional questions:

• Did you actually begin your trade or business?
  • Did you advertise for potential customers
  • Did you attempt other marketing to potential customers
  • Did you have sales but just were not paid in 2023

[Mike9241 · Accepted solution]

if the business was active in 2023, since the SUE were less than $50K you can deduct $5000 in 2023 and amortize the balance over 180 months starting with the month the business began. the fact the business had no revenue is irrelevant.  The $5K + amortization will offset other income on your return. 

[jemmadky]

Yes, the business was actively marketing and pursuing leads. Thank you for your answer!