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.
