topic Optimizing deductions and whether to add legal fee under start up cost vs business expense? in Deductions & credits

Optimizing deductions and whether to add legal fee under start up cost vs business expense?

HangginAround — Mon, 09 Mar 2026 05:12:32 GMT

Hi,

I opened a new S corp in 8/2021 and paid $1500 in legal fees in 10/2021. Does it matter if I put this fee as start up cost vs business expense? I'm curious if this makes a difference in deductions. Thanks!

Re: Optimizing deductions and whether to add legal fee under start up cost vs business expense?

ZoltanB45 — Wed, 23 Feb 2022 03:39:36 GMT

Does not make a much of difference but 2 things to consider

Lawyer organized the business so it wasnt legal fee-organizational cost
It happened prior to legally having a business to deduct expenses

Enter it as an organizational or start-up cost.