Open TurboTax

Why sign in to the Community?

  • Submit a question
  • Check your notifications
or and start working on your taxes
Announcements
Your taxes, your way. Get expert help or do it yourself. >> Get started
Close icon
Do you have a TurboTax Online account?

We'll help you get started or pick up where you left off.

cancel
Showing results for 
Search instead for 
Did you mean: 
cruizo1
New Member

What is the best way to file my startup cost? Backstory--I just an LLC last year. I paid Upworks X dollars to create the app.

 
1 Reply
KarenL2
Level 5

What is the best way to file my startup cost? Backstory--I just an LLC last year. I paid Upworks X dollars to create the app.

The date you "opened your doors" for business is your start date. This is the date you could receive revenue, whether or not you actually did receive any. Your expenses prior to that are Start Up Costs.  If this was 2016, you will report those costs in 2016.  If the app wasn't finished until 2017, then you will wait and report it on your 2017 tax return.

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 . 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.

Any business loss you incur is netted with the other income on your tax return, so the best way to claim it might be a personal choice for certain expenses, while others need to be amortized.  (see link below)

Start-up costs include any amounts paid or incurred in connection with creating an active trade or business or investigating the creation or acquisition of an active trade or business.       Organizational costs include the costs of creating a corporation. 

Note: You can elect to deduct or amortize certain business start-up costs. Refer to chapters 7 and 8 of Publication 535, Business Expenses


How to get there in TurboTax:

While inside the software and working on your return, type start-up expenses in the Search at the top of the screen (you may see a magnifying glass there).  There will be a popup that says Jump to  start-up expenses.  Select that to get to the general area.  



About Community

Learn about taxes, budgeting, saving, borrowing, reducing debt, investing, and planning for retirement.

3.49m
Members

2.62m
Discussions

Manage cookies
v