NEW BUSINESS

[bskbrown1]

I started a new business in the end  of 2023 but had no income until 2024 but startup costs in 2023 so i didn't file as a business until this year. It asks me if I started my business in 2024 but the answer is no because my license say 2023 and I would like to deduct those costs but I have no carryover form. I haven't paid any taxes so far so i know I will owe but please help me at least be able to deduct those start up costs.

[Vanessa A]

When you say you started the business in 2023, were you active and ready to make money or were you preparing to make money by getting licenses, products, etc?  

If you were preparing to make money, then you would consider 2024 your first year of business so you would answer yes.  Then you would enter your start up costs under business expenses.

If you were actually operational in 2023, then you would need to Amend Your Return for 2023 in order to claim the start up expenses.  This would result in a loss that could offset your ordinary income. If the expenses were incurred prior to your opening you can amortize the expenses which would allow you to claim the deduction over a 180 month period. 

Start-up Business Tax Tips