Question

I started by own business in 2016 and I have a question about taking a business loss deduction. Since my start-up costs were more than my income would I qualify for a business loss tax deduction?

Answer

You should qualify for a business loss deduction because you can deduct a limited amount of business expenses including:

  • Start-up costs
  • Expenses for creating an active trade or business
  • Expenses for investigating the creation or acquisition of an active trade or business

You can take these types of business loss tax deductions in the year your business was started. You can deduct up to$5,000 in expenses for your business. You’ll need to reduce the $5,000 cap dollar-for-dollar by the amount the start-up costs are more than $50,000.

You can amortize the remaining start-up costs over 180 months starting with the month your business begins.

Related Topics

Related Resources

Tax Reform and Expats – A Brief Look Ahead

Expats are subject to recent changes under the Tax Cuts and Jobs Act much like any other taxpayer. Read on to learn more about how to prepare in the Tax Information Center.

Taxes Get Personal: What’s Your Filing Status?

Do you know what your tax filing status is? Learn how to determine and check your tax filing status with H&R Block.

Is Volunteer Work Tax Deductible? | H&R Block

Spending your time volunteering is a great way to give back. Learn more about the tax benefits for volunteer work when filing your taxes at H&R Block.

10 Ways Getting Married Affects Your Taxes in 2018

What happens to your taxes after marriage? Learn how marriage can lead to changes in tax filing and returns at H&R Block.