Sign Up

Why sign in to the Community?

  • Submit a question
  • Check your notifications
or and start working on your taxes
cancel
Showing results for 
Search instead for 
Did you mean: 
tbam0
Level 1

I have a full time job (W2) and this year I started investing a small amount of money (<$2000) to start a small business. Is it possible to write those expenses off?

The small business is ecommerce online sales but no sales yet. Planning to sell IT equipment.

Money spent on computer hardware, hosting, software, outsourcing, home office.

I've been slowly spending money for a few years but the first time I consider writing any of it off.

Thank you.
1 Best answer

Accepted Solutions
HelenC12
Expert Alumni

I have a full time job (W2) and this year I started investing a small amount of money (<$2000) to start a small business. Is it possible to write those expenses off?

 

You can elect to deduct up to $5,000 of start-up costs and amortize the remainder over 180 months, beginning with the tax year the business begins.

 

In TurboTax, there is separate entry for Startup Costs in the Business Expenses section.

 

Once general information and self-employment income is reported, you will arrive at the business expenses section.  

  1. Select Start up costs - you will be asked to enter your total startup cost, and the date incurred (which should be before you started your business).
  2. Then, the program will ask you how much you'd like to deduct; the rest is automatically amortized for you.

The deduction of $5000 will be listed as “other expenses”, whereas the amortization will be reported as your depreciation. Source: MargaretL

 

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

View solution in original post

1 Reply
HelenC12
Expert Alumni

I have a full time job (W2) and this year I started investing a small amount of money (<$2000) to start a small business. Is it possible to write those expenses off?

 

You can elect to deduct up to $5,000 of start-up costs and amortize the remainder over 180 months, beginning with the tax year the business begins.

 

In TurboTax, there is separate entry for Startup Costs in the Business Expenses section.

 

Once general information and self-employment income is reported, you will arrive at the business expenses section.  

  1. Select Start up costs - you will be asked to enter your total startup cost, and the date incurred (which should be before you started your business).
  2. Then, the program will ask you how much you'd like to deduct; the rest is automatically amortized for you.

The deduction of $5000 will be listed as “other expenses”, whereas the amortization will be reported as your depreciation. Source: MargaretL

 

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

View solution in original post

Dynamic AdsDynamic Ads
Privacy Settings
v