I started a business in 2021, but haven't made any income. Can I still write off expenses?

Yes. You can deduct your expenses as start-up costs. Startup costs come from investigating the creation or acquisition of an active trade or business. They are paid or incurred before the business begins.

Examples include:

 - Market research

 - Travel costs

 - Salaries

 - Consulting fees

 - Accounting and legal fees

 - Pre-opening advertising expenses, and

 - Overhead

How these expenses are handled:

Up to $5,000 of startup costs paid or incurred can be deducted if the total startup costs incurred don't exceed $50,000. An election can be made to amortize costs in excess of $5,000 over a period of 15 years.

If total startup costs exceed $50,000, the excess over $50,000 reduces the amount you may deduct. For example: If you incur $52,000 worth of startup costs, you can deduct $3,000 ($5,000 - ($52,000 - $50,000 = $2,000)) and amortize the remaining $49,000 over at least 15 years.

To enter your startup costs, please follow the steps below: 

1. Open your return.
2. Search Schedule C.
3. Click on the Jump to link.
4. Click on Add a Line of Work.
5. Follow the on-screen instructions.
6. On the page titled, Your Info, scroll to the bottom and click on Looks good.
7. On the page titled, Let's enter your income, click on Skip for Now.
8. On the page, First, select the expenses you know you had, click start up costs.
9. Scroll down and hit continue.
10. Follow the on-screen instructions.
11. Click start next to Startup costs.
12. Answer yes to the question, Did you have start up costs?
13. Follow the on-screen instructions.