Must all start-up expenses for a farm be addressed through amortization/expense in the tax year the business starts or can it be entered in two or more successive years?

Forum|Forum|11 months ago
April 9, 2025
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AmyC

Enter it once. All start up costs are incurred before making money. You would not have any start up costs once you begin making money. You can write off some off your start up costs (up to $5,000) and amortize any remainder. If you go over $50,000, there are different rules. The SBA has a great section, Calculate your startup costs.

Notice in How does starting a business affect my taxes? those expenses reduce your taxable income.

Once you start making money, you will have to pay the Self-employment tax and need to make quarterly Estimated taxes or increase your withholding with your job.

Reference: Small Business and Self-Employed Tax Center | IRS

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17434976Author

After reading those references it indicated I couldn’t expense start-up costs until the business was placed in service. But it seems you’re indicating I can expense startup costs in years prior to the business being opened for business. Is that correct?

AmyC

I am so sorry! Expenses go into the start up bucket to be used when the business actually starts making money. The start up expenses are entered once, when the business begins filing tax returns with income.

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