Can I write off my LLC formation fees?

The cost of forming an LLC is considered an organizational expense and can be deducted, but not all at once. According to the IRS, these costs must be amortized, or gradually deducted, over a 15-year period. This means you can deduct a portion of the costs each year for 15 years. However, the IRS allows you to deduct up to $5,000 of organizational costs in the first year of business, but this amount is reduced by the amount your total costs exceed $50,000. If your costs are $55,000 or more, you can't take the $5,000 deduction.