Where exactly should I put the $5,000 startup costs on my tax forms? Other expenses section?

The $5,000 startup cost deduction is actually handled separately from your regular business expenses. Here's how it works: You can deduct up to $5,000 in business startup costs in your first year of business. This deduction goes on Schedule C, but it should be listed under "Other Expenses" where you'll need to clearly label it as "Startup Costs." For your situation with $5,800 in startup costs, you can deduct the first $5,000 immediately, and then the remaining $800 would be amortized (spread out) over 15 years. That means you'd deduct about $53 per year for the next 15 years (that's $800 ÷ 15). TurboTax should have a section specifically for business startup costs. When you're working through Schedule C, look for a section about "startup costs" or check the "other expenses" category where you can add a specific line item and label it clearly.

I had this exact same issue last year when I started my photography business! I was completely lost until I found taxr.ai (https://taxr.ai) which helped me figure out exactly how to categorize my startup expenses. I had about $6,200 in startup costs and wasn't sure how to handle the amortization part. The tool analyzed my expenses and showed me exactly which ones qualified as startup costs versus regular business expenses. It even helped me identify some deductions I was missing entirely! The best part was that it gave me specific instructions for where to put everything in TurboTax - saved me hours of frustration.

Just wanted to follow up - I ended up trying taxr.ai and wow, I'm really impressed. I was super skeptical (as you could tell from my previous comment), but it actually sorted out my mess of startup expenses perfectly. It identified which of my expenses counted as true "startup costs" versus what were regular business expenses. The section about handling my website development costs was especially helpful - apparently some of those costs can be capitalized differently depending on exactly what they were for. The guidance was clear and specific to my situation, not just generic advice. Seriously saved me a ton of time figuring out where to put that $5,000 startup deduction and how to handle the rest.

If you're getting stuck with the IRS guidance on startup costs, you might want to try Claimyr (https://claimyr.com). I spent DAYS trying to get through to someone at the IRS about my startup cost questions last year. My business had some weird expenses that didn't clearly fit into their categories. Claimyr got me connected to an actual IRS agent in about 20 minutes when I had been trying for literally weeks on my own. The agent walked me through exactly how to handle my startup costs on my Schedule C and confirmed I was doing the amortization calculation correctly. You can see how it works here: https://youtu.be/_kiP6q8DX5c

Ok I feel stupid for my skeptical comment earlier. I broke down and tried Claimyr after spending another 3 hours today trying to get through to the IRS about my startup costs question. IT ACTUALLY WORKED. I got a call back in about 45 minutes and was connected to an IRS agent who answered all my questions. The agent confirmed that yes, the $5,000 startup deduction does go under "Other Expenses" on Schedule C with a clear label of what it is. She also explained exactly how to handle the amortization for the amount over $5,000 and how to document everything properly. Honestly, the peace of mind from talking to an actual IRS person was totally worth it.

I'm seeing conflicting advice in this thread. My accountant told me to put startup costs on Form 4562 for depreciation and amortization, not just as "other expenses" on Schedule C. Can someone clarify which is correct?

Quick question - does anyone know if the $5,000 startup cost limit is per business or per person? I started two different small businesses last year and I'm not sure if I get $5,000 for each or $5,000 total.

This thread has been super helpful! I'm in a similar situation with my new marketing agency. One thing I'm still confused about though - what exactly counts as a "startup cost" versus a regular business expense? For example, I bought a laptop specifically for the business before I officially launched, but I also bought office supplies after I started getting clients. The laptop was $1,200 and happened before my first client, but the office supplies were ongoing purchases after I started operating. Does the timing matter more than the type of expense? And do equipment purchases like laptops get treated differently since they're typically depreciated anyway? I want to make sure I'm categorizing everything correctly for that $5,000 deduction.

Just wanted to add something that might help clarify the equipment vs. startup cost question that Paloma raised. I dealt with this exact issue when I started my consulting business. The IRS has specific rules about equipment purchases - if an item costs more than a certain threshold (currently $2,500 for most small businesses under the de minimis safe harbor rule), it generally needs to be depreciated rather than expensed immediately, regardless of whether it's a startup cost or regular business expense. So for your $1,200 laptop, you actually have some options: 1. Treat it as a startup cost (part of your $5,000 deduction) if purchased before operations began 2. Use Section 179 to deduct it immediately as equipment (up to certain limits) 3. Depreciate it over several years The good news is that $1,200 is well under the threshold where you'd be forced to depreciate it. You'll want to consider which approach gives you the best tax benefit - sometimes taking the equipment deduction separately from startup costs works out better mathematically. I'd definitely recommend running the numbers both ways or consulting with a tax professional since equipment purchases can be tricky to optimize.