website development

[vince rich]

I am self-employed starting in 2024 and I have capitalized my website development costs ($5560) for 2024. The website is not  placed in service yet. Should I take the whole $5560 as expense since I'm under the $50k as start up costs. I continue to have additional costs in 2025.

[DaveF1006]

The treatment of website development costs depends on whether they are considered startup costs or capital expenditures. Since your website is not yet placed in service, the costs incurred in 2024 may be classified as startup costs, which are subject to specific tax rules.

Under IRS guidelines, businesses can deduct up to $5,000 in startup costs in the first year, provided total startup expenses do not exceed $50,000. Any remaining costs must be amortized over 15 years. Since your total website development costs for 2024 are $5,560, you may be able to deduct $5,000 immediately and amortize the remaining $560 over time.