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Business failed in less than a year. How do i deduct startup costs?
I started a Sole Proprietorship LLC in 2018 with roughly $13,000 in start up costs. The business was a failure with only one sale, so I had to shut the business down in the same year, 2018. How can I deduct all of my startup costs in the same year my business started?
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Business failed in less than a year. How do i deduct startup costs?
I'm sorry to hear about your business.
You can deduct any startup costs and regular business expenses you may have
incurred (even if there is no income). Startup costs can only be deducted
in the year you start business (after you open your doors).
In order to report expenses, you will need to use TurboTax Self-Employed (online) or one of the TurboTax CD/Download products.
Before you enter your startup costs, make sure that you have entered that the business started and ended in 2018.
- Click Income and Expenses and then click the Start/Revisit box in the Self-Employment section.
- On the Your 2018 self-employed work summary screen, click on Edit next to your business.
- Click the Edit box next to General Info
- In the General Info section, check that Started work in 2018 and Stopped work in 2018 both say Yes. If not, click Edit and make the changes.
- Click Continue and then Looks Good to get back to the Here's your [business] info screen.
You can enter your startup expenses using these steps:
- On the Here's your [business] info screen, click on the box Add expenses for this work.
- On
the Tell us about any expenses screen, click the radio button next
to Start-Up Costs.
- Click Continue when done. TurboTax will walk you through the data entry.
Once you have finished entering your startup costs you will be brought back to the Here's your [business] info screen. Click the box Add expenses for this work, so to enter other expense categories.
You can deduct up to $5,000 of startup costs as a current business expense. The remainder is amortized over 180 months.
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.
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Business failed in less than a year. How do i deduct startup costs?
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Business failed in less than a year. How do i deduct startup costs?
Add the expense of setting up the website to your start-up costs. Anything else can be entered as an expense.
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Business failed in less than a year. How do i deduct startup costs?
"Startup costs can only be deducted in the year they were paid (for a cash basis business)."
I had some costs that were incurred in 2017 since I didn't actually start the business until January 2018. From what I read, you deduct them in the year the business started, which in my case was 2018. How do I treat these costs?
Also, which Turbo Tax product or offering would be best to use in my situation. I've never used it before.
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Business failed in less than a year. How do i deduct startup costs?
You should use TurboTax Self-Employed [Online] or TurboTax Home & Business [CD/Download], since you have expenses to report with the business.
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Business failed in less than a year. How do i deduct startup costs?
**TurboTax Self-Employed is done online on the website: <a rel="nofollow" target="_blank" href="https://turbotax.intuit.com/">https://turbotax.intuit.com/</a>
**TurboTax Home & Business is a program downloaded onto your computer. With this version you can prepare and e-file 5 tax returns (in case you want to do returns also for your family members). The tax file is stored on your computer. You can purchase/download it by going to: <a rel="nofollow" target="_blank" href="https://turbotax.intuit.com/personal-taxes/cd-download/">https://turbotax.intuit.com/personal-taxes/...
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