Can you deduct costs from before the business started?
Yes. Up to $5,000 of what you spent getting ready to open is deductible in the first year, and the rest is spread over fifteen years.
The rule
Startup costs are what you spend before the business opens: market research, advertising the launch, training, travel to line up suppliers, professional fees. In the year the business starts you can deduct up to $5,000 of them.
The $5,000 shrinks dollar for dollar once startup costs pass $50,000, and whatever you can’t take at once is deducted over 180 months.
Equipment bought before you open isn’t a startup cost. It is deducted, like any equipment, once you start using it for the business.
- Where it goes
- Schedule C line 27a, other expenses, with Form 4562 for the rest
- What to keep
- Receipts from before the first sale, with what each was for.
- Watch for
- If the business never starts, the costs generally aren’t deductible at all.
Checked on September 25, 2026 against Publication 334, Tax Guide for Small Business. An estimate for your records, not tax advice.
See it on every receipt.
Snap it and Reimburse files it on the right Schedule C line, takes the deductible share and shows what it puts back.