Can I write off business expenses I paid for my husband's business that hasn't earned income yet?

Forum|Forum|3 years ago
December 9, 2022
2 replies
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TurboTax Online

Texas Roger

Level 15

You can deduct business startup costs for certain things within limits. See this IRS publication: https://www.irs.gov/newsroom/heres-how-businesses-can-deduct-startup-costs-from-their-federal-taxes

Opus 17

Level 15

I’m assuming this is a schedule C business (single member LLC or sole proprietorship). Startup costs are handled on the tax return for the first year the business is active as an ongoing business activity. Startup activities before the business is active are saved and added to the first year. Amounts less than $5000 can be expensed while amounts over $5000 must be partly expenses and partly amortized over 15 years according to a complicated formula. Asserts (equipment) is placed in device issuing the usual rules.

Active means engaged in ongoing business activities. It doesn’t necessarily mean getting paid. For example, a graphic designer who sings their first contract in 2022 and starts work but doesn’t get paid until 2023 is active in business in 2022 and will file a schedule C listing all their expenses including startup expenses.

Mike9241

Level 15

has the business started? start-up expenses to the extent allowed by law can not be deducted until the year the business actually commences which most times is when customers are actively sought. this can be the case when the doors are opened or ads are placed or its website goes active. doesn't matter whether there's any revenue.

Mike9241