Yes, you can claim your business startup expenses, but
not on your 2016 tax return. The general rule is that business startup expenses
are deductible in the year when active trade or business begins. Since you had
no income-generating events in 2016, your startup expenses will become
deductible in 2017, when your new business begins to generate revenue. Please
see IRS Pub. 535
Business Expenses for more information.
Also, you must distinguish between startup expenses and the
amount spent on business assets (machines, equipment, vehicles, etc.). These
assets are depreciable over their useful life, although in many cases can be
expensed in the first year put in service under Section 179 of the Internal
Revenue Code. When you are ready to file your 2017 tax return, TurboTax
Self-Employed (if it is a disregarded single-member LLC) or TurboTaxBusiness (if you have a multi-member LLC) will guide you through the steps to enter information about these
assets and make the correct choices to expense or depreciate their value.
