Business Tax Write Offs: Start Up Costs

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This video will explain what start-up costs are and how you can write them off. For more business start-up, accounting & tax info, check out our channel or our blog at

Business expenses that can normally be deducted when you are operating are NOT deductible before your business actually begins operating. For example, if you are a retail store, you haven’t began operating until you open the store and have items for sale. All expenses incurred before your business begins are called ‘start-up’ costs.

In the month your business begins operating, you can begin to deduct your start-up costs. There is an initial deduction in the first month of up to ,000. If you have more start up costs than this then you can amortize what is left. Amortize means that you take the total amount of costs and divide by 180 months. The result is called amortization expense, which is deducted just like any other expense each month.

If your total start-up costs are more than ,000, then the initial ,000 deduction is limited for , based on the amount over ,000. So if you have ,000 worth of start-up costs then there is no initial deduction and you must amortize the entire amount over 180 months. The video shows a great example of this limitation!

This content is from our online video Self-Employed Tax Course. For everything you need to know about self-employed taxes, check out our course!

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