My client's question is below. I would be telling him that before he is open for business there are no business losses to deduct and he does not file a tax return. When he opens for business he can deduct $5000 startup expenses and possibly $5000 Organizational expenses but the rest will have to be amortized over a period of 15 years. My question is because I have seen entities with 0 income I wanted to make sure of my answer to him. Also, I think R and D expenses do not work for a company before they open for business?
So if I spend money on hosting, consultant fees etc can I deduct the expenses for the year or if for some reason lets say I am ready to start 2020 I lose the ability to deduct 2018 expenses? The thing with these technology ideas is that I will have to put many months of work time and money before I am ready to launch/ and make money.