Thanks Annette — This helps to know that home office expenses cannot be considered start-up costs. I didn't see this myself anywhere on the IRS website, so your clarification helps. With that said, as a result now I am a bit confused about how TurboTax Online is treating startup costs.
While the business didn't actually incorporate and do business until October, my spouse's work to investigate and set up the business started in March. So in TurboTax's "When the work started" field for this line of work, seemingly the accurate date to enter would be March based on the way TurboTax has asked the question "Tell us about how long [spouse name] has worked in [line of work]" ---> "Enter the start date"? I assume that date TurboTax is asking for is supposed to be about when the *work* actually started (Mar), and not when the *business* started operating (Oct)?
Assuming March is correct (if not, please correct me about what TurboTax is actually asking for, and then you can ignore the rest of this message): By selecting March, TurboTax won't accept any "startup expenses" that occurred after that March date.
However, when I look at the IRS's definition of startup costs at https://www.irs.gov/newsroom/heres-how-businesses-can-deduct-startup-costs-from-their-federal-taxes, it says they are:
- Defined as "amounts the business paid or incurred for creating an active trade or business, or investigating the creation or acquisition of an active trade or business."
- Recoverable if "It's a cost a business pays or incurs before the day their active trade or business begins."
So, by this definition, the costs incurred "before the[...] business begins" should be all the way from March through October. Seems pretty straightforward. But TurboTax will only accept through March, based on the fact that I've told it that's when when the line of work started.
So am I misinterpreting what TurboTax is asking for when it asks when this line of work started?
