Can I write off business startup costs?

Business startup costs are considered capital expenses and can be deducted under certain conditions. These costs include any amounts paid or incurred in connection with creating an active trade or business, or investigating the creation or acquisition of one. Generally, you can deduct up to $5,000 of business startup costs in the year you start the business. The $5,000 deduction is reduced by the amount your total startup cost exceeds $50,000. If your startup costs are $55,000 or more, you won't be able to take the $5,000 deduction. Any startup costs that can't be deducted can be amortized over a 180-month period. It's important to keep detailed records of these expenses to substantiate your deductions.