Need help handling startup expenses for a lead generation website

[mrgendrich0]

Hello,

I am looking for some guidance in writing off startup costs in a lead generation website (digital real estate company) I invested into in 2022. This company sets up a website (I am owner) and generates leads that are sold to local businesses. For this I pay an initial startup cost to own and setup the site and a 25% commission on revenue. The company says that 90%+ of the startup costs can be tax deductible, but I'm not sure which costs are deductible, which is here I need help to understand which are/ are not. Would these costs all be realized in the year I invested (2022) in which case I may have to do a tax restatement or would they offset income as it comes to me in 2023 and beyond? Below is the table of up front costs they provided to me. Any info and/or guidance on how to best handle this is greatly appreciated, thank you!

Quantity	Description	Unit Price	Total
1	Domain	$10.00	$10.00
1	SEO Svcs: Competitor Analysis	$700.00	$700.00
1	SEO Svcs: Keyword Research	$700.00	$700.00
5,000	SEO Svcs: Content writing	$.10	$500.00
1	SEO Svcs: Website build & optimization	$3,200	$3,200
1	SEO Svcs: GMB + social listing	$400.00	$400.00
1	SEO Svcs: GMB optimization	$490.00	$490.00
		Total	$6,000.00

[KochuK]

Hi mrgendrich0, thanks for posting an event question.

Business startup costs include any amounts paid or incurred in connection with creating/investigating the creation or acquisition of an active trade or business.

Startup costs should be paid and incurred before your business operation date when the website is up,  functional and operational.

Using the above guideline, you should be able to determine the tabled items which are startup costs, and which are regular business expenses.

You can elect to deduct $5,000 startup costs in 2022, and the balance to be amortized over 15 years.

IRS Pub 535 Business Expenses, page 27, "Business Startup and Organization Costs"

https://www.irs.gov/pub/irs-pdf/p535.pdf 

Hope the above helps. Thank you.