When starting a new business the amount of first year qualified business start-up expenses that can be expensed are limited. Start-up costs that cannot be deducted in the first year may be amortized or written-off over 180 months starting with the month the business begins.
Under prior law, you could generally only deduct up to $5,000 in start-up costs in year one. The Small Business Jobs Act of 2010 has double the first year write-off to $10,000. The first year deduction is also limited by the amount the total start-up costs exceed a phase-out threshold of $60,000. For every dollar your start-up costs exceed $60,000 you must reduce your first year write-off of $10,000 until it reaches zero.
