Tax question about atty/acct fees incurred prior to actually incorporating biz. PLEASE READ MORE!?

Hello, tagi_65! Yes, those expenses definitely qualify as legitimate business expenses that can be deducted. Any costs you incur that are directly related to the creation of your business (such as legal & tax advice regarding LLC versus corporation) are considered "organizational expenses." Any costs you incur for either researching or starting the actual business activities are "business start-up costs." You can elect to write-off up to $5,000 of organizational and start-up costs in your first year; otherwise, all such costs are amortized (deducted in chunks each year) over 15 years.

The first link below explains the initial costs of starting a business, and the second link explains the optional $5,000 immediate write-off. Good luck! :-)

The general rule regarding organization costs is that they must be amortized over a 15 year period. However, there is an exception- you may elect to expense up to $5000 of these in the first year of business.

See IRS Pub. 535, Pg 23 etc.