irs tax start-up zero revenue


I am doing taxes for someone who had about $1,500 in 2011 expenses for a new business (sole-proprietorship) but no income. Can she deduct these start-up costs in 2011 or will she have to add them to 2012 taxes even though the expenses were in 2011. The IRS regs say "int the year the business begins" but I am not sure if that means first year with revenue.

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asked Mar 4 '12 at 16:02
11 points

2 Answers


The business begins when the business is incorporated. Business may have investments for which they do research and pay salaries and only after the product is ready revenues may begin. That is how my accountant explain it to me.

answered Mar 4 '12 at 16:28
1,779 points
  • Thank you. Now I am considering it the other way -- do we HAVE to deduct the start-up costs in the year they were incurred or can they be deducted next year when there is actually revenue? I think they can be saved for next year, any ideas? – Melinda 12 years ago
  • That is an accountant question. My guess would be unlikely. – Karlson 12 years ago


Does it really matter? You will either pay less taxes this year, or next year. I would rather have the money now. We are not talking about a large sum of money. It will save them ~$500-600 on their tax bill.

answered Sep 13 '12 at 04:05
Need A Geek Indy
562 points

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