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Starting a New Business?

starting a new business

Are you Starting a New Business?

Whether you intend to buy an existing business or are starting a new business, you’ll want to keep track of the expenses you incur before you begin the business.

Your “start-up” expenses can generate a tax deduction for you in the year the business becomes active. Among other items, start-up expenses may include amounts paid for:

  • Market research
  • Travel to find suppliers or distributors
  • Pre-opening advertising and employee training

The deduction, which is elective, is available for as much as $5,000 of start-up expenses. Any remaining expenses would have to be deducted ratably over a period of 180 months.

Ordinary and necessary expenses incurred in expanding an already existing, active business are generally deductible without regard to the rules for start-up expenses.

Keep these items in mind when starting a new business.

Small business tips from the IRS