First, the instruction below belongs to the church that is not yet open. As you indicated in an earlier post, your husband will be a pastor for this church in 2024 and receiving a W-2 from the church.
The fees for the Articles of Incorporation would be considered startup expenses because they occurred before the corporation began conducting or was open for business.
It's important to understand a couple of things. One, the expenses that can be deducted start from the time it was open for business. Any expenses to research, analyze and legally begin the business are called 'start up expenses'. You have a choice on how you want to handle those.
- Amortize (take an expense each year)
- Elect to deduct up to $5,000 in the year the business begins operations.
- Start up costs have a 15 year (180 month) recovery period using amortization (an equal amount for each month). The amortization is under the Assets expense for your business and you must select to 'Add an asset' once you reach the Business Asset Summary page.
- Select Intangibles, Other property on the Describe This Asset page.
- Select Amortizable intangibles on the Tell Us a Little More page
- Type Start up Costs as the description, then the cost remaining to be amortized and the date you opened for business
- Code selection is 195 Business Start Up Costs
- Enter 15 years for the Useful Life (in Years)
- The IRS allows you to deduct $5,000 in business startup costs and $5,000 in organizational costs, but only if your total startup costs are $50,000 or less.
@aprcox20
[Edited: 04/15/2024 | 6:56 AM PST]
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