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apadamap
New Member

I formed or started a business in 2016, but haven't actually done any work yet or received any income from it. do I need to report this when I file my taxes?

 
1 Reply
MinhT
Expert Alumni

I formed or started a business in 2016, but haven't actually done any work yet or received any income from it. do I need to report this when I file my taxes?

If your business had no income and no deductible expenses in 2016, then you do not need to report anything on your tax return.

However, if you had start-up costs even with no income, you can deduct these start-up costs in the year you started your business.

Business start-up and organizational costs are generally capital expenditures. However, you can elect to deduct up to $5,000 of business start-up and $5,000 of organizational costs paid or incurred after October 22, 2004. The $5,000 deduction is reduced by the amount your total start-up or organizational costs exceed $50,000. Any remaining costs must be amortized.

Start-up costs include any amounts paid or incurred in connection with creating an active trade or business or investigating the creation or acquisition of an active trade or business. Organizational costs include the costs of creating a corporation.

Claiming your start-up costs will result in a loss, which helps reduce your taxable income.

In order to claim these start-up costs on your tax return, you'll need to use TurboTax Self-Employed (online version) or TurboTax CD/Download (desktop version).


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