Business start-up and organizational costs are generally capital expenditures.
For costs paid or incurred after September 8, 2008, you are not required to attach a statement to your return to elect to deduct such costs.
Turbo Tax will let you enter the expenses without having entered any income.
Can you claim expenses if you have no income?
In your first few months or year of operation you may not bring in any income. Even without income, you may be able to deduct your expenses, as long as you meet certain IRS guidelines. Your business loss can offset other income on your tax return and lower your overall tax bill.
Can you deduct expenses on Schedule C with no income?
Yes, while you may not have made any profits, if since you have expenses, you may want to file a Schedule C to claim them. If you do not claim your expense in the year you pay them, you may not be able to deduct them in the future when you do have income.
Can I write off startup costs?
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. If your startup costs for either area exceed $50,000, the amount of your allowable deduction will be reduced by that dollar amount.
Can you claim business expenses without a 1099?
No 1099 means no deduction! Not filing a 1099 is certainly against the rules. True, you can get some unwanted attention from the IRS, and you can be slapped with significant penalties. However, the tax law clearly states that a business can deduct all “ordinary and necessary” business expenses.