start up expenses
the taxpayer shall be allowed a deduction for the taxable year in which the active trade or business begins in an amount equal to the lesser of—
(i)the amount of start-up expenditures with respect to the active trade or business, or
(ii)$5,000, reduced (but not below zero) by the amount by which such start-up expenditures exceed $50,000, and
(B)the remainder of such start-up expenditures shall be allowed as a deduction ratably over the 180-month period beginning with the month in which the active trade or business begins.
i would say if she's soliciting potential customers her business has started.
losses the first few years can present a problem - hobby losses
IRC 183
(b)Deductions allowable
In the case of an activity not engaged in for profit to which subsection (a) applies, there shall be allowed—
(1)the deductions which would be allowable under this chapter for the taxable year without regard to whether or not such activity is engaged in for profit, and
(2)a deduction equal to the amount of the deductions which would be allowable under this chapter for the taxable year only if such activity were engaged in for profit, but only to the extent that the gross income derived from such activity for the taxable year exceeds the deductions allowable by reason of paragraph (1).
(c)Activity not engaged in for profit defined
For purposes of this section, the term “activity not engaged in for profit” means any activity other than one with respect to which deductions are allowable for the taxable year under section 162 or under paragraph (1) or (2) of section 212.
(d)Presumption
If the gross income derived from an activity for 3 or more of the taxable years in the period of 5 consecutive taxable years which ends with the taxable year exceeds the deductions attributable to such activity (determined without regard to whether or not such activity is engaged in for profit), then, unless the Secretary establishes to the contrary, such activity shall be presumed for purposes of this chapter for such taxable year to be an activity engaged in for profit.
put another way losses in any 2 out of 5 consecutive years could raise the spector of the IRS alleging she's engaged in a hobby. then the burden of proof falls on her.
she should also read IRS PUB 535 business expenses
https://www.irs.gov/pub/irs-pdf/p535.pdf
meals: the deduction for business meals is limited to 50% of the amount that would otherwise be deductible (IRC 274(n)). the 50% limit also applies to meals associated with business travel, even if the meal cost is not separately stated from the total cost of the event. the taxpayer must reasonably allocate the cost between meals and other costs.
