do I need to officially register a business with the government before I can deducts its expenses?

Yes, you can not take deductions for a compnay that does not exist.

No. Some expenses are recoverable, but under strict rules. An accountant should be able to guide you with this, since it is a tax matter. The following extract from the site: http://www.businessknowhow.com/money/startuptax.ht...

will give you the general idea. Good luck in your new business.

What expenses for starting my business are deductible?

Prior to October 22, 2004, startup expenses weren't immediately deductible. They had to be amortized over time, or treated as part of the basis (starting value) of the business.

Now, however, under Section 195 of the Internal Revenue code, business owners can deduct up to $5,000 in startup expenses, in the year the business is launched.

These startup costs include costs of studying a prospective business and the costs for actually launching it such as initial advertising expense, employee training, equipment, etc. To take the deduction, you have to fill out Form 4562, Depreciation and Amortization form and included it with your tax return.

From a tax standpoint, when does my business actually begin? Is it with the first customer?

You can be in business if you are ready to accept customers. The actual event that triggers you being in business (as opposed to starting a business) will vary by the type of business and your own personal way of operating. Something as simple as registering a business name, or having business cards made up, or even accepting money for something you have done for free up to now (teach friends to use computers, for instance) can be the "grand opening" of a homebased business.

Remember: while you don't have to have acquired any customers or made a profit to be in business, if you don't make a profit in three out of five years you could trigger the hobby-loss rule.