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Thursday, April 30, 2015

Deducting Startup Costs for California Corporations

A corporation can elect to deduct up to:

- $5,000 business startup
- $5,000 organizational expenses.

Once a corporation passes $50,000 in business startup, the deduction is reduced dollar for dollar ($55,000 in startup costs = $0 deduction)

Whatever is not deducted must be amortized over 15 years (180 months) starting the month the corporation begins business.

If a corporation has startup costs to amortize, form 4562 must be attached to the corporate tax return for the year the amortization begins.