I suggest you following references for starting the business
Having the company incorporated, obtaining the license, etc doesn't indicate that you are started the business. Please separate these expenses that occurred before the business started (start-up cost) and after the business started (operational cost)
Your operational cost will be deducted from gross income and the business losses will offset other taxable income you might have.
The business income and expenses will be reported on the schedule C - http://www.irs.gov/pub/irs-pdf/f1040sc.pdf
There will not be any self-employment taxes because you are reporting losses.
The net loss will be reported on the form 1040 line 12 - http://www.irs.gov/pub/irs-pdf/f1040.pdf
Start-up cost - expenses you had before the bossiness started - in general should be amortized over 15 years. You can write off up to $5,000 in startup costs and another $5,000 in organizational expenses in the year that you start your business. However as you had losses you may not deduct start-up cost.
Start-up cost is considered your investment and treated differently. If you can't deduct start-up cost in the first year - you should amortize these expenses over 15 years - thus in the first year you will deduct 1/15 part of the total expenses - and so on in following years.
If you sell the business before deducting all of the start-up costs, the taxpayer may deduct the remaining start-up costs as a loss as allowed by Sections 165 and 195(b)(2).
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Taxes, Immigration, Labor Relations
Start-up costs are amounts paid or incurred for: (a) creating an active trade or business; or (b) investigating the creation or acquisition of an active trade or business.
Startup costs are deductible expenses, but there are some rules how they are deducted.
You may deduct startup costs only in the year the business has actually started.
You should amortize these expenses over 15 years - thus in the first year you will deduct 1/15 part of the total expenses - and so on in following years.
Start-up cost is considered your investment and - if your business is not started yet - none of startup costs are deductible.
It doesn't matter if your business is incorporated or not - it does matter that you have started your business activities.
Please be aware that organizational costs (amounts paid to organize a corporation, LLC, etc) are treated separately from startup costs.
Please see for reference IRS publication 535 - http://www.irs.gov/pub/irs-pdf/p535.pdf
When you start a business, treat all eligible costs you incur before you begin operating the business as capital expenditures which are part of your basis in the business. Generally, you recover costs for particular assets through depreciation deductions. However, you generally cannot recover other costs until you sell the business or otherwise go out of business. See Capital Expenses in chapter 1 for a discussion on how to treat these costs if you do not go into business.
For costs paid or incurred after September 8, 2008, you can deduct a limited amount of start-up and organizational costs. The costs that are not deducted currently can be amortized ratably over a 180-month period. The amortization period starts with the month you begin operating your active trade or business. You are not required to attach a statement to make this election. Once made, the election is irrevocable. See Temporary Regulations sections 1.195-1T, 1.248-1T, and 1.709-1T.
You will file schedule C - if you have business activities and you will deduct a part of your startup costs. If you have business losses - they will be used to reduce your other taxable income.
But if you do not have any business activities - you should not use schedule C.
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