Get
Answers

Finding answers to your tax questions is now less taxing.

Get Answers To Your Tax Questions

H&R Block Tax Professionals relentlessly focus on making sure you profit from every deduction and credit available.

Can I claim start-up expenses and no income for my own business?

Yes, you can claim a portion of the start-up expenses in the first year even if you don't have income from your business.

You can deduct up to $5,000 of your business start-up costs:

  • In the year you started the business
  • Paid or incurred before the day the business opens

You must reduce the $5,000 cap dollar-for-dollar by the amount of start-up costs in excess of $50,000 .

Ex: If start-up costs are $51,000, the cap is reduced to $4,000. If start-up costs are $55,000 or more, the $5,000 deduction is completely phased out.

You can amortize the remaining start-up costs over 180 months, starting with the month business begins. You might be able to treat start-up costs as nondeductible capitalized costs. You’ll do this if you don’t deduct them the year:

  • You incur the costs.
  • You amortize the costs over 180 months.

You can't recover these costs until the business is dissolved.

Start-up costs are usually costs incurred before the business opens. (Ex: advertising costs for the opening of a business). They are the costs incurred in connection with:

  • Investigating the creation or acquisition of an active trade or business
  • Creating an active trade or business

Businesses don’t have to make a formal election to deduct start-up costs incurred or paid after Sept. 8, 2008. Instead, businesses make their election in the first year of business by either:

  • Deducting the cost
  • Amortizing the cost

Once made, you can change the election only with IRS consent.

Look At Your Life Through Taxes

No matter which life stage you're in, H&R Block has the tools and resources to help you understand how taxes impact your life. It's our Purpose. We look at your life through tax... and find ways to help.

Tax Calculators

Estimate your withholdings, calculate your refund, or find out how health care laws may impact you.

Browse Tax Articles

Looking for articles written by the pros at H&R Block? Search our article database to find answers to all of your tax related questions.

Offer Details and Disclosures