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Merlo, Accountant
Category: Tax
Satisfied Customers: 9783
Experience:  25+ years tax consulting. Specializing in returns for US citizens living abroad
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This question is in regards XXXXX XXXXX related to attempting

Resolved Question:

This question is in regards XXXXX XXXXX related to attempting to do an at-home self employment business. I got started in one of these programs and have over $10K in expenses for training materials, classes, business cards, newsletters, mailings, etc. I have had no income from this effort. My basic question is: can one still deduct (or adjust other personal income by) these expenses - even though no income is realized this year? Thanks, Jim
Submitted: 8 years ago.
Category: Tax
Expert:  Merlo replied 8 years ago.
Hello jwark,

All of the costs that you mentioned are considered to be start up costs.

When you start your own business, you may deduct up to a total of $5,000 in start up costs and another $5,000 in organizatinal costs in the first year that you actively start your business. Actively starting your business means that you actually have your products or services advertised and available for sale. It does not necessarily mean that you had any income for that first year.

Any costs which exceed the $5,000 must be amortized over a period of 15 years. If you sell or close or otherwise dispose of your business prior to the end of the 15 year period, any remaining costs are deducted in your final year of operation.

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Thank you jwark.

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