Start A Business

Step 3: Business Start-up Costs

Business start-up costs are the expenses you incur before you actually begin business operations. Your business start-up costs will depend on the type of business you are starting. They may include advertising, travel, surveys, and training. These costs are capital expenses. Capital expenses are expenses you deduct over a number of years.

You usually recover costs for a particular asset (such as machinery or office equipment) through depreciation (see "depreciation"). Other start-up costs can be recovered through amortization. This means you deduct them in equal amounts over a period of 60 months or more. If you don't choose to amortize these start-up costs, you generally cannot recover them until you sell or otherwise go out of business.