IF Start UP COSTS new business and use OVERHEAD (w...
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cheapgenius
New Member

IF Start UP COSTS new business and use OVERHEAD (what is included as overhead) and how do you put in the date incurred, do I have to do this in day by day increments? ?

equipment and travel etc.. ie: I bought equipment on several occasions, is each entered individually and other overhead entered separately even if it's $1599 1/2 and $220 on  1/ 9 or is it all combined as OVERHEAD $1819 on 1/3/202 ?
3 Replies
ColeenD3
Employee Tax Expert

IF Start UP COSTS new business and use OVERHEAD (what is included as overhead) and how do you put in the date incurred, do I have to do this in day by day increments? ?

How these expenses are handled:

Start-Up Expenses are reported in aggregate - one amount equal to the total of all expenses incurred. For active business activities, these costs are entered either under Assets/Depreciation or under Business Expenses.

 

Per IRS Pub 535 Business Start-Up and Organizational Costs: "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."

 

As long as your start-up expenses are less than $5000, you can add them as Business Expenses. Continue past the expense categories (or choose Other Miscellaneous Expenses) to the page titled "Enter Business Expenses Not Yet Reported" and enter the description & amount.

 

If you have more than $5000 in start-up costs, the remainder is entered under Assets/Depreciation as a capital asset for amortization (TurboTax provides this category for you).

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memory
Returning Member

IF Start UP COSTS new business and use OVERHEAD (what is included as overhead) and how do you put in the date incurred, do I have to do this in day by day increments? ?

Thank you for the extra information. However you didn't answer the question. I have the same question. I purchased several small equipment purchases over several months leading up to the start date for my multi-partner LLC. May I enter them as one "equipment" expense and with what date.

AmyC
Employee Tax Expert

IF Start UP COSTS new business and use OVERHEAD (what is included as overhead) and how do you put in the date incurred, do I have to do this in day by day increments? ?

@memory  Actually, that is the answer. All expenses prior to opening go in one bucket called start up expenses. It is entered in the assets and depreciation section. The start date would be the date to use for the amortization of the total of all start up costs.

 

Equipment would not be separated out unless it was purchased after the business opened.

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