Edited
No, that would be torture. Total your purchases of any supplies and record it under supplies. The same hold true for any category of expense.
If you are referring to 2018:
A recent U.S.
Tax Court decision drives home the important point that current deductions
aren’t allowed for most expenses incurred while a new business is still in the
start-up phase. Other decisions have dealt with the same issue in recent years.
So, the proper federal income tax treatment of start-up expenses remains an
ongoing source of confusion for taxpayers.
Here’s what you
need to know about deducting start-up costs, along with a real-life example of
how the Tax Court applied the rules.
Internal Revenue
Code Section 162 allows current deductions for “ordinary and necessary”
business expenses. Section 162 expenses are basically routine expenses incurred
in operating an up-and-running business. Examples include employee wages, rent,
utilities and advertising. Section 162 expenses can generally be deducted in
the year when they’re paid or incurred.
Many taxpayers
are unaware that Section 162-type expenses incurred by a start-up can’t
necessarily be deducted right away. That’s because these expenses are
classified as Section 195 start-up expenses until the “active conduct” of
business begins.
Once a taxpayer
meets the active-conduct standard, Section 162-type expenses become Section 162
expenses, and the taxpayer can deduct them currently. (This assumes that other
provisions — such as the passive activity loss or at-risk basis rules — don’t come
into play and prevent current deductibility.)
