As long as this is a business you are starting, with the intention of making a profit, then yes, you can report your expenses. It sounds like you have start-up expenses. You can deduct up to $5,000 in start-up expenses and anything above that is required to be amortized. According to the IRS, start-up costs can be amortized (deducted) over 180 months.
You can enter the costs up to $5,000 as you would report typical expenses. In other words, if you had $1,000 in legal fees and nothing else, simply report a $1,000 legal fee expense on Schedule C.
Here's how to report amortizable start up expenses in TurboTax Online:
- Navigate to Federal > Wages & Income > Self-employment income and expenses
- Edit the business or create a new one
- Choose "Add expenses for this work"
- Select Assets and continue
- In the list of expenses, assets will now appear. Select the pencil icon to edit
- On the screen, Any Large Purchases (Depreciable Assets)? select "Yes"
- Continue through interview, on the screen Describe This Asset, choose Intangibles, Other property
- On the screen Tell Us a Little More, choose "Amortizable intangibles"
- Describe the asset as start up costs, enter the cost and the date purchased. You can group costs for the same month together, but create new assets for purchases in different months, because the amortization calculated to the month
- Continue through the interview and when you get to Select a Code Section, choose 195: Business Start-up Costs
Here is an article you may find helpful: Start-up Business Tax Tips
