Expenses startup tech company

Technical topics regarding tax preparation.
#1
PHall  
Posts:
220
Joined:
18-Sep-2014 10:12am
Location:
San Francisco East Bay, CA
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.
 

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