Absolutely. When you advertise as open for business and you can begin business operations you can begin to deduct expenses.
- If the expense was to prepare you to open for business then it's a startup cost.
- If it was after you opened for business its an operating expense like other ordinary and necessary expense of doing business.
-
Equipment is considered purchased when it is placed in service/placed in use.
- Startup Business Tax Tips
The IRS language states you must be engaged in the activity to produce a profit. It is reasonable to have a loss on the overall business in the first couple of years while you gain momentum. The rule they use is three years of profit out of every five consecutive year period.
- Business Tab
- Continue
- I'll choose what I want to work on
- Business Income and Expense Update or Start
- Edit > Business Profile (look to see if you indicated the business was acquired in 2016)
- Edit as appropriate - If No, there will be not Startup Cost selection
- Business Expenses - Startup Costs
- Edit or Delete
- Click the attachment to enlarge and view
