Sometimes starting a business takes a lot of time, work, and money. Here are the answers to your questions:
- Being active in a business, means that you are involved in daily activities. You put your time and work into the business not just your capital.
- Regarding your question about when a business starts, it starts when you are operational, when you begin providing goods or services to your customers when you start generating income.
- Timing is important when claiming start-up expenses, you can't claim them until your business starts and it is operational.
If you would like to see more information about Start-ups, see the TurboTax help article below:
Start-up expenses have to be amortized with a recovery period that starts with the month the business begins to operate active trade or as a business. See the following IRS page for more information on deducting start-up expenses.
Here’s how businesses can deduct startup costs from their federal taxes
Feel free to reach us again if you have additional questions.
[Edited 3/23/24 | 5:25AM PST ]
